Half Of The World’s Neon Production Is Stopped In Ukraine, Clouding Outlook
Two of Ukraine’s largest suppliers of neon, who produce half of the world’s supply, have stopped operations. Moscow has intensified its attacks on Ukraine, threatening to increase prices and worsen the shortage of semiconductors.
According to Reuters calculations, between 45%-54%, the world’s semiconductor-grade neon, which is critical for lasers used in making chips, comes from two Ukrainian firms, Ingas or Cryoin. These figures are based on data from the companies and Techcet, a market research firm. Techcet estimates that the global neon consumption for chip production was approximately 540 metric tonnes last year.
According to company representatives contacted via Reuters, both firms have shut down their operations as Russian troops escalate their attacks on cities across Ukraine, killing civilians, and destroying important infrastructure.
The global stoppage casts a shadow over the production of chips. Chips were already in short supply following the coronavirus pandemic which drove up demand for cars, cell phones, and laptops. Some firms had to reduce their production.
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