Home » Tech » With the war in Ukraine, half of the world’s neon production needed to produce chips came to a halt – ČT24 – Czech Television

With the war in Ukraine, half of the world’s neon production needed to produce chips came to a halt – ČT24 – Czech Television

Forty-five to fifty-four percent of the world’s neon important for lasers used in the manufacture of integrated circuits comes from Ukrainian companies Ingas and Cryoin, Reuters estimates, according to data from companies and research company Techcet. Global neon consumption for this production last year was 540 tons, Techcet calculates.

Prior to Russia’s invasion of Ukraine, Ingas produced 15,000 to 20,000 cubic meters of this gas per month for customers in Taiwan, Korea, China, the United States and Germany. About seventy-five percent of it was for the chip industry. The company is based in Mariupol, which is under siege by Russian forces.

The Odessa-based Cryoin company produced ten to fifteen thousand cubic meters per month. The company ceased operations on February 24 to ensure employee safety, said Business Development Director Larissa Bondarenko. According to her, the company will not be able to fulfill March’s orders for thirteen thousand cubic meters.

Ukrainian neon is a by-product of Russian steelmaking. The gas, which is also used in laser eye surgery, is also produced in China.

Pandemics are also raising prices

At the same time, there is still a shortage of chips in connection with the coronavirus pandemic, which, among other things, has increased the demand for mobile phones, laptops and later cars. Their lack has already forced some companies to reduce production. Estimates of how much neon integrated circuit manufacturers have in stock vary widely. However, if the conflict lasts, it could negatively affect production, warned CFRA analyst Angelo Zino.

According to Bondarenko, neon prices, which were already under pressure due to the covid-19 pandemic, have risen by as much as five hundred percent since December. According to Chinese media, the price of neon gas in China quadrupled between October and the end of February.

New suppliers around the world could start production. However, it would take nine to two years to launch, said Richard Barnett, chief marketing officer, Supplyframe, a market intelligence firm. Zino added that companies may not be willing to invest in the process if the supply crisis is considered temporary.

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