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Neon supply disruption from war in Ukraine threatens semiconductor industry

Chip production could slow down again as a result of the ongoing war in Ukraine.

Donovan Erskine

March 25, 2022 9:50 AM

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Russia’s invasion of Ukraine has had a massive political and humane impact over the past month. It’s also created new obstacles for global economies, including the US. One of the ongoing stories in that space over the past couple of years has been the semiconductor shortage, which has been exacerbated by complications surrounding the pandemic. Now, the war in Ukraine may introduce new problems that will limit chip production.

We first learned from CNBC that Russia’s invasion of Ukraine could also mean bad news for the semiconductor industry. Ukraine is a major producer of neon, a gas used in lithography, the chip-production process. According to the report, more than half of the world’s neon is produced by Ukrainian companies. This includes Iceblick, Ingas, and Cryoin, with the latter two having closed their business operations earlier this month.

The COVID-19 pandemic first stirred up major problems for the semiconductor industry back in 2020, and its effects are still being felt today. It’s caused issues for the production of electronics such as the Xbox Series X/S and PS5, as well as GPUs, and even Tesla vehicles. Although there had been some signs of improvement in recent months, the drop in neon supply could mean more shortages are on the way.

A lack of neon supply as a result of the war in Ukraine will likely cause more woes for the semiconductor industry. However, it’s important to keep in mind the human cost of the events taking place in Eastern Europe right now. If you’re looking for places to donate in order to support those fleeing the violence in Ukraine, Shacknews has a round-up of organizations to consider.

Donovan Erskine

News Editor

Donovan is a young journalist from Maryland, who likes to game. His oldest gaming memory is playing Pajama Sam on his mom's desktop during weekends. Pokémon Emerald, Halo 2, and the original Star Wars Battlefront 2 were some of the most influential titles in awakening his love for video games. After interning for Shacknews throughout college, Donovan graduated from Bowie State University in 2020 with a major in broadcast journalism and joined the team full-time. He is a huge Scream nerd and film fanatic that will talk with you about movies and games all day. You can follow him on twitter @Donimals_