back to article Chip world's major suppliers of neon gas shut down by Ukraine invasion – report

Analysts warned Russia's invasion of Ukraine could derail the supply chains of semiconductor fabs. Now those concerns are playing out with the apparent shuttering of two major neon gas suppliers in Ukraine. For a report today Reuters calculated that the two neon suppliers, Ingas and Cryoin, produce 45 to 54 percent of the …

  1. midgepad

    Theres a bit of Neon in

    the atmosphere.

    Take some CO2 out while you are at it, please.

    1. Throatwarbler Mangrove Silver badge

      Re: Theres a bit of Neon in

      Or go hat in hand to every bar and tavern asking to buy their beer signs.

    2. Dr Paul Taylor

      Re: Theres a bit of Neon in

      the atmosphere.

      Yes, it's produced by distillation of air. There's no other way.

      So this could be done anywhere with a power supply. No excuse for there only being one source.

      1. Erik Beall

        Re: Theres a bit of Neon in

        I believe the Ukrainian sources are actually by-products of natural gas production, and not distillation, which may be significantly more expensive. I've also read it's used in lasers but I don't understand why it would be rapidly consumable, it may also be used as inert atmosphere for the many oxygen and nitrogen-free steps in lithography.

        1. Yet Another Anonymous coward Silver badge

          Re: Theres a bit of Neon in

          Inert atmospheres that can't use Nitrogen tend to use Argon (rather than other noble gases) it's the biggest atom so it's easiest to leak control.

          Unlike fscking Helium that can leak out of a black hole, fsckign helium I still hate you......

          1. Yet Another Anonymous coward Silver badge

            Re: Theres a bit of Neon in

            ps The biggest of the noble gases you can buy cheaply from BOC (yes I know Krypton and Xenon are bigger (and still fsck Helium))

          2. Steve Davies 3 Silver badge

            Re: Unlike fscking Helium

            and H2 is a whole lot worse when it comes to leaks.

            1. Yet Another Anonymous coward Silver badge

              Re: Unlike fscking Helium

              >and H2 is a whole lot worse when it comes to leaks.

              Yes but at some point it will explode and solve the whole leak problem !

              ps I wonder if H2 leaks are less of a problem if they would form chemical bonds when squeezed through a tiny gap in some metal seal?

        2. Kev99 Silver badge

          Re: Theres a bit of Neon in

          Last I heard the US is one of the largest producers of natural gas in the world. And that doesn't even take into account all the politicians.

          The main reason, I'm guessing, is the chipper are more concerned about keeping their "angels" and Wall Street happy so the went to the cheapest source. I wonder if the price they pay is the "at the wellhead" price or the "at the factory" price, which includes the costs of compressing the gas, storing it at the wellhead, transporting it through pipelines, storing it at the ports, loading it into the tankers, sailing across the ocean, unloading the gas into storage tanks, shipping it through pipelines to the user. I guess US companies are too cheap to set up their cyrogenic distillation refineries.

          1. Yet Another Anonymous coward Silver badge

            Re: Theres a bit of Neon in

            It's one of those things where it isn't worth getting into the market (except for wars)

            You could fit collection, purification, liquification, storage and transportation equipment and you might make the same profit as the existing single plant in $Country$. Except they already have paid for all this plant and they already have contracts with the few people who are customers for this. 2 suppliers wouldn't grow the market enough to support 2 suppliers.

            It's especially common where you require some purity standard that you can't really specify other than knowing that existing supplier X seems to work - so long as they don't change their process. This seems to apply to almost all materials used in the semiconductor industry.

            1. UdoGoetz

              Even Worse

              Siemens once found out that they need certain Impurities in a certain chemical used for semiconductor production. So changing the supplier can disrupt operations, even if the new supplier produces a chemical at better purity !

              1. Yet Another Anonymous coward Silver badge

                Re: Even Worse

                It used to be that the quartz for the crucibles used to melt the silicon for wafers all came from one seam in one mine in the USA.

                It was never worth the risk of making a furnace from anywhere else because some tiny impurity could screw up all your wafer supply - perhaps in some way that you don't discover until you have made devices.

        3. BOFH in Training

          Re: Theres a bit of Neon in

          From this and other sites :

          Ukraine makes more than 90% of the high-grade neon in gas-phase lasers used to make chips produced by U.S. semiconductor companies. The gas is a biproduct of Russian steel manufacturing which is purified in Ukraine, said market research company Techcet. Neon prices soared during the Russia-Ukraine conflict in 2014.

          I understand from reading up about this that Russian steel manufacturing, which uses an older process which requires them to distill the air. And Neon is a by product that.

          Anyone can setup a facility to make neon from air, problem is, neon is only 18.18 ppm of the atmosphere, or 0.001818% of the atmosphere, even lesser then CO2.

          So a purpose built plant for neon extraction is going to produce very little neon for alot of atmosphere processing. That will probably make things abit expensive.

  2. Anonymous Coward
    Anonymous Coward

    Why do chips need neon?

    OK so I know they use silicon and I know they put stuff in for p-type and n-type doping, but... what does the neon do?

    1. Michael Hoffmann Silver badge

      Re: Why do chips need neon?

      A MSM article on the topic I just read had a throw-away sentence about it being used for clean production without further explanation. However this

      says it's for the lasers used in production.

      1. Bitsminer Silver badge

        Re: Why do chips need neon?

        And the lasers probably last 5 years before replacement.

        FUD (fast-flying uniform disinformation).

        1. Jellied Eel Silver badge

          Re: Why do chips need neon?

          I'm curious.

          I've seen comments that it's needed for He-Ne lasers as well, but curious what those would be used for. But I've never designed a fab plant. I kinda view that as extreme photography though. Reliably create 5nm or less components using 630nm light. Probably involves witchcraft, or sacrificing rubber chickens.

          I have used those lasers, and one issue is helium doesn't like being imprisoned. So He diffusing out of the laser tube would alter the He-Ne ratio, and the beam characteristics. So guessing tubes might be flushed and refilled to get the right ratio again.

          A related application might be cooling though, where neon is cheaper than helium. Especially if stories about 'peak helium' are true. But no idea if cryocooling is needed. But if you're photographing at 5nm or less, cryocooling might be a way to stop your subject moving as much. Or it's used to refrigerate other parts of the process.

          I also saw mentions of another chemical I'd never heard of. I think it was a flourocarbon that looked like it might be a solvent.

          1. Yet Another Anonymous coward Silver badge

            Re: Why do chips need neon?

            HeNe is only used for "regular" UV lasers. The EUV black-magic fuckery with tin plasma, megawatt lasers (and probably stargates) that you need for 5nm TSMC stuff doesn't need it.

            1. Jellied Eel Silver badge

              Re: Why do chips need neon?

              So I read a bit about EUV and comparison to excimer systems. I even understood a lot of the words. OK, I used wiki, and had to double check one bit.

              So excimer lithography does 200W/cm²

              EUV needs 10¹¹W/cm²

              As Gizmo would say, bright light! Which I guess means it's wrong to suggest it's dark magic, but foul sorcery seems apt given the chemicals needed. Also whilst it may be possible to squeeze more channels out of DWDM systems, and probably drive Earth-Moon fibres unrepeatered, an EUV laser wouldn't fit in an SFP.

              And also why politicians might be a tad optimistic saying we should just build more fab plants given each tool would need 1MW+ electricity. Guessing that's a reason why fab plants get built where energy costs are low.

              1. Stoneshop

                Re: Why do chips need neon?

                And also why politicians might be a tad optimistic saying we should just build more fab plants given each tool would need 1MW+ electricity. Guessing that's a reason why fab plants get built where energy costs are low.

                Just cut off the local cryptobro's around where you plan to put a new chip fab, and if they complain too loudly get them a hometrainer to generate their own leccy.

                Dependent on the cutting off they may not be able to operate it, but that'd be just tough luck.

      2. sebacoustic

        Re: Why do chips need neon?

        ArF lasers for DUV (193nm) lithography use it: laser medium is actually mostly Neon by volume, though the actual lasing is done by argon fluoride. The gas doesn't "wear out" but it collects impurities over time (from vessel walls etc) so it's replaced on a regular basis. Fabs have stepped up by installing gas-recycling equipment to capture the "old" neon rather than vent it, but there is still a need for fresh Neon gas.

        1. Jellied Eel Silver badge

          Re: Why do chips need neon?

          Cheers. Was wondering if it was something like that, ie some dye lasers where you use one source to get the next stage excited and laseing.

  3. Dinanziame Silver badge

    That's a good thing!

    Having a global supply chain that breaks down in various places as soon as there's a war anywhere on earth makes it less likely that governments will resort to war.

    People inconvenienced by the lack of chips for their new rig can console themselves thinking that at least, they don't have bombs falling on their town.

    1. Anonymous Coward
      Anonymous Coward

      Re: That's a good thing!

      Good I got my new laptop before this all went sideways, more sideways?

      To bad I got it 2 days after my travel charger died. And of course I was traveling and not getting home for several more weeks.

      So do your backups often, even when on the road. If I had had a backup that was less than month and a half old, it wouldn't have mattered so much. Luckily I got a cheapo charger from Amazon in a couple of days and got by with my smart phone till then. But then I'm retired now so I could have waited longer if needed.

    2. Paddy B

      Re: That's a good thing!

      No they can't console themselves. No chips means no PlayStations for them...

      (I'll get my coat)

    3. nobody who matters

      Re: That's a good thing!

      "Having a global supply chain that breaks down in various places as soon as there's a war anywhere on earth makes it less likely that governments will resort to war".

      No, not in the least. In fact (when looking at reasons for a number of wars, particularly those in more recent history), it becomes apparent that it makes fighting over a valuable resource more likely, not less.

      1. Hans Neeson-Bumpsadese Silver badge

        Re: That's a good thing!

        I believe that was the reason that Germany invaded Ukraine during WW2 - to get control of oil/gas.

  4. Jellied Eel Silver badge

    I suspect you're right, after all, we've already had a few oil wars.

    But there are alternatives. So supplies of neon might be curtailed on account of Ukrainian supplies becoming contaminated with rubble. So maybe Air Liquide increases production. Or another chemical company does. Or there's the sanction effect. If Russia can't important neon, maybe it'll start producing it itself, and sanctions have less effect other than guiding investment policy. No neon? Make it. No vodka exports? Do your patriotic duty and drink more.

    Plus sanctions are bi-directional. Russia can't buy neon, EU can't buy Russian fertiliser. Consumers suffer, especially if the EU can't produce it's own. Especially when EU policy makes fertiliser production restrictive and expensive. So to make ammonia, you need gas and energy, which is against EU policy. And if there's no fertiliser, crop yields drop, and nudging people to go vegan is harder. And with less livestock, there's less urea & other organic fertiliser.

    (Air Liquide has always amused me given their business is literally plucking money out of the air.)

    1. Yet Another Anonymous coward Silver badge

      >EU can't buy Russian fertiliser. Consumers suffer,

      The Eu will survive, they can buy Canadian fertilizer and Canadian or American wheat.

      Russia and Ukraine are 20% of the world's wheat exports.

      It's the poor countries that are going to suffer. Which poor countries with large populations are on easy sea routes from the Black sea? Perhaps Russia will send some wheat to prop up Syria but wheat is going to get seriously scarce in Egypt/Libya/Algeria/Morocco and I can't imagine the USA rushing aid shipments to a bunch of brown people in countries with the wrong version of their fairy tales.

      I wonder if Europe will be as welcoming for for 10-millions of starving North African refugees as it is for Ukrainians?

      1. nobody who matters

        "The Eu will survive, they can buy Canadian fertilizer and Canadian or American wheat."

        We already do buy North American wheat, and always have since they started exporting it to us at least as early as the early 1800s (ironically it is the hard 'red wheat' varieties that are used to improve European bread making grists; the original red wheats originated in Russia!).

        It is mainly Asia and Africa who import Russian wheat.

        Neither the UK, nor any of the EU countries import wheat from Russia - The EU and the UK have been net exporters of wheat for a long time, and have in the past introduced curbs on production to try to avoid the massive overproduction that happened in the 1970s and 1980s. Indeed, back then, the USSR was the biggest export market for UK and EU wheat. Russia's recent level of wheat production has only come about as a result of Western investment in agriculture in the former Soviet states, and many of the farmers, agronomists and advisors who have led this turnaround have been immigrants from the EU, including the UK who saw the opportunities that were there 20 or 30 years ago.

        If it wasn't for all the dubious 'green energy' schemes (solar farms, growing wheat and rape for energy production and vast areas of maize and rye to feed into anaerobic digestion plants), we would have the capacity to significantly increase current wheat production in western Europe.

        Fertiliser is a different matter - Russia is a major source of phospate and potash for producing compound fertilisers in Western Europe, and the energy to extract the nitrogen from the atmosphere to produce ammonium nitrate comes almost exclusively from gas, much of it directly, or indirectly from Russia. The second most important source for nitrogen fertiliser is urea, a significant proportion of which is also imported from Russia. Fertiliser supplies within the EU and UK are likely to be tighter than they already have been (prices for nitrogen in particular were already at their highest level ever, even before the current situation arose), and the likelihood is that yields and quality will be reduced by the reduction in availability, which coupled with all the other price pressures on fuel and energy for food production, processing and transport, you can expect your weekly food shop to increase in price dramatically.

        Political sanctions have never had much success historically, and I don't expect them to make a jot of difference now. They are almost certainly going to make us suffer more than Putin and his circle of thugs currently running Russia (and it is plain that they don't give flying toss about the rest of the Russian population). Likewise, cutting them of the web will harm us as much as them in the long term.

        Biden seems to think that the West taking direct action might start WW3. I've news for him - it has already started (both the first and second world wars started in a similar fashion, and all the hand wringing polititians thought it could be ended without a fight on both those occasions too).

        1. UdoGoetz

          Still Luxury Problem

          All the fertilizer chemicals we need for our farmers is already inside the system. We just need to collect the chemicals and bring them again onto the land. Nitrogen comes from the air using Haber-Bosch.

          Flushing important chemicals down the pipe is the main issue.

        2. Jellied Eel Silver badge

          Law of unintended consequences.

          I wonder what the long-term consequences will be.

          Currently there's 'surplus' production that's being kept off the market by sanctions. Assuming nations follow those. Not every nation does. So Russia might continue to sell or send food aid to those countries. Cuba's been sanctioned for decades, so relies on food aid. Same with Syria given hostile forces have invaded, occupied and sometimes destroyed their agricultural production.

          So nations might have a choice to ignore sanctions, or starve. Especially if sanctions are being used to justify profiteering. Yes, Lebanon, you can still buy US or EU food, but we're going to charge you more because capitalism. Meanwhile, Russia's apparently been offering big discounts to buy from them rather than commodity speculators. I mean traders. Pay 20% premium for 'conflict free' commodities, starve and risk civil unrest, or ignore sanctions and risk being sanctioned yourself by your friends & allies.

          So long-term, there's a risk that the supply chain shifts. EU & US still have product, but fewer customers and influence. Especially if nations seeking to avoid sanction shocks invest in their own production to avoid future disruption. Hey, we need neon, let's produce it and export the surplus.

          So supply increases, prices fall, inflation becomes deflation, and everyone's happy. Well, maybe not economists who think deflation and lower costs are bad.

          Then as you say, there's the impact of other policy decisions. We inflate our costs by making our energy costs artificially high. EU wants chips. OK, let's build a business case for a fab plant in say, Germany. Needs say 10MW electricity supply, which is going to be expensive given all the 'green' subsidies inflating energy costs/prices. And being large energy users, we'd also need to buy carbon indulgences, even though chip production is low CO2.

          So maybe Germany's a bad idea, especially if they run out of gas. UK might be a better idea. Could do a combo deal with a fraccer like the Eden Project... I mean Cuadrilla to supply gas, build a 500MW gas turbine and sell surplus electricity to the grid. But input cost would be gas price negotiated with Cuadrilla not the 'global oil price. Plus if we can convince BoJo to divorce or repeal the Climate Change Act, we could eliminate the green crap as well.

          And then there's food. We think it's a really good idea to burn this. So motorists are experiencing record pump prices because the global price of ethanol has risen. We turn food into ethanol, blend that with petrol or diesel, and reduce the mpg. Because this is green and efficient. We add duty for the ethanol and petrol/diesel, and slap 17% VAT on top.

          Consumers might start wondering why they're expected to pay a lot more for inferior product, where costs are increasingly de-coupled from 'global' prices. Especially if you've signed up for a 'green' energy contract. Your gas is biogas produced from agricultural waste, so why would your bill be doubling?

          Or food itself. Stop burning it, and food prices would fall. Stop fertilising, and yields will fall, so food & biofuel prices rise. Make fertiliser, but that needs gas, which we're making more expensive. Distill nitrogen from the air, but that needs a lot of energy, and we're making that artificially expensive. Plus there might be additional costs, like carbon taxes for 'waste' CO2 left over from nitrogen removal.

          Or the other stuff like potassium & other nutrients. We've been running low on fossil fertiliser (coprolite), organic (guano), and we're desperately trying to eliminate animal waste. Now we're eliminating Russian potash. On the plus side, we have Drax, one of the world's largest destroyers of forests. I guess they could supplement their already massive subsidies by flogging wood ash for fertiliser. Even with the amount of wood burned, I doubt that would make much of a dent in potash demand.

      2. Potemkine! Silver badge

        For decades the EU had to pay subsidies to avoid to produce to many agricultural goods, for instance by asking for fallows. Remove this fallows and European production will mechanically rises.

        The biggest problem and the one nobody wants to talk about is that we are more and more on this planet, and this isn't sustainable. Natality reduction is mandatory, especially in poor countries.

        1. Jellied Eel Silver badge

          Well, wars have a way of eliminating populations. Or redistributing them. So over 3m people have left Ukraine since conflict started in 2014. So a lot of young people who've left their workforce and been added to other nations.

          And more recently, Ukraine's been trying to prevent their men from leaving. So Ukraine's exporting their women and children to the EU, which has been struggling with an aging population and declining birth rate. Just one of the many ways Ukraine has been screwed since 2014.

          But such is war. It took Europe a long time to recover from WW2's depopulation effects.

    2. Lars Silver badge

      "Russia can't buy neon". Invading Ukraine they can just take it, no need to buy it, sadly.

      1. Anonymous Coward
        Anonymous Coward

        90% of production is in Ukraine and... Russia!!!

        So where do you think you'll get it from with the current situation?

        1. captain veg Silver badge

          My guess would be somewhere else.


  5. Panicnow


    The issue is purity, My guess they need 99.999% purity. That isn't easy, even using the same equipment the Ukrainians use!

    I bet there are other "Gotchas" in the supply chain we'll only notice later.

    Bet the countries that have neon ban the export of neon in the next few hours.

    Just to make a bad problem worse!

  6. Michael Wojcik Silver badge


    Well that brought back memories.

    I was at the Modern Language Association's annual convention1 one year and saw a panel on anime, where one eager young gentleman waxed enthusiastic about Neon Genesis Evangelion. He all but called it the greatest work of art in history. I thought, well, Gainax has pulled off one of the more elaborate trolls there.

    (I mean, I enjoyed NGE, in a vaguely bemused way; but it's no Gunbuster.)

    1A tolerably large affair at the time, in the early 2000's.

    1. diodesign (Written by Reg staff) Silver badge

      Get in the f***ing robot, Shinji

      I'm glad someone got it.


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