Strain on the semiconductor manufacturing market could increase because of the attacks Russia launched this morning on Ukraine, which provides 90% of the neon used by lasers for chip production in the US.
The availability of chips, necessary for electronics of everything from digital appliances to vehicles, is already under strain because of Covid-related supply challenges.
Recently, Deloitte reported that $500 billion in revenue had been wiped out because of semiconductor demand outstripping supply.
The lag of computer chips required by automotive manufacturers alone resulted in a sales loss of about $210 billion for 2021, the professional services network said.
Now, with Russia launching military strikes from Belarus into the Ukraine, semiconductor production looks set to take another major hit, coming as it does when manufacturers in the US are only beginning to recover from output lost to lockdown regulations during the pandemic.
Neon gas, a bi-product of steel manufacturing in Russia, is purified in the Ukraine before it’s shipped to the States.
Moreover, 35% of the palladium used in sensors and computerised memory is sourced in Russia, the target of US and European sanctions meant as a retaliatory response to the Kremlin.
Although it was reported yesterday that neon supply out of the Ukraine is stable despite war tension on its eastern front, that situation has now changed with strategic missile strikes and aerial bombardments from Belarus this morning.
In footage broadcast by CNN, cars were packed bumper to bumper on roads leading out of Kiev and Kharkiv, two of the main cities shelled by Russia in its attempts to ‘demilitarise’ the Ukraine.
Although Russian President Vladimir Putin has gone on record about the strikes targeting Ukrainian military infrastructure and not civilians, the shelling occurred in heavily populated areas.
Jan Egeland, secretary general of the Norwegian Refugee Council (NRC), said the Ukraine’s border with Belarus will suffer an extreme humanitarian ordeal because of Russian aggression.
He said the NRC expects a stream of refugees west towards the city of Lviv and the Ukraine’s border with Poland.
