Other issues, such as supply chain delays and chip shortages, have plagued the world in addition to the coronavirus pandemic throughout the past year. Due to the fact that we are currently experiencing a new crisis for which it is difficult or impossible to forecast how long it will persist and what its end will be, the issue arises as to whether the Russian invasion of Ukraine would strike a major blow to the global semiconductor industry. A new crisis has begun, and it is difficult or impossible to estimate how long it will persist and what its end will be; the question today is whether or whether the Russian invasion of Ukraine will give a major blow to the global semiconductor market.
This issue was answered by Reuters journalists after they spoke with a number of chip manufacturers and industry experts. It appears that the current crisis will not have a substantial impact on the supply of chips in the near future. Concerns have been raised about the long term. We spoke with a number of chip producers and industry experts, and it appears that the new crisis will not have a substantial impact on the supply of chips in the immediate term.
Besides stocking up on necessary components in time, many chipmakers have also upgraded their supply networks in order to protect themselves in the case of a prolonged Russian-Ukrainian conflict lasting several months.
What needs to be stressed is that Ukraine supplies the United States with more than 90 percent of its neon, a chemical element that is essential for lasers used in the fabrication of semiconductors. It is estimated that a full-scale war that would disrupt the export of these elements might have a negative impact on major corporations such as Intel, which is 50 percent unprofitable in Eastern Europe. Furthermore, Russia supplies 35 percent of the palladium utilized in the United States, which is used in sensors and memory, among other applications. According to a well-informed Reuters source who requested anonymity, chipmakers would not be directly affected by the crisis; instead, the impact will be felt by companies that supply them with components (including neon and palladium) originating in Russia and Ukraine, according to the source. It is possible that this will have an impact on the growth in chip costs. Chips are expensive.
On the plus side, according to the same source, businesses today are more prepared for market disruptions, which should help to lessen the impact of the current crisis. The White House, anticipating the worst-case situation that we are now witnessing, had cautioned chipmakers even earlier to seek other suppliers of critical components in order to avoid becoming reliant on Russia for their supply. Furthermore, as a result of the trade dispute between the United States and China, they began diversifying their component supply even earlier.
According to Reuters, Intel, South Korean memory manufacturer SK Hynix, and numerous other chip and component manufacturers stated that there was no cause to be concerned at this time. However, according to the Japanese company Ibiden, even if they presently have sufficient supplies of materials, including neon and other components that they obtain from Russia, the situation with sanctions may alter in the future. We are a little concerned, say representatives from that company, which, in the event of a crisis, will be forced to seek alternative sources of raw materials.
