Chipmakers Brace For Noble Gas Shortage, After Russia Cut Supply!

Chipmakers Brace For Noble Gas Shortage, After Russia Cut Supply!

Chipmakers worldwide are bracing for a noble gas shortage, after Russia cut supplies! Here is what you need to know…

 

Chipmakers Brace For Noble Gas Shortage, After Russia Cut Supply!

On June 2, 2022, the Russian government issued a decree stating that export of noble gases will be subject to Moscow’s approval until December 31, based on the recommendations of the Ministry of Industry and Trade.

This effectively cuts or limits the export of critical noble gases to “unfriendly” countries, and was a direct response to the fifth round of sanctions imposed by the European Union in April.

Russia and Ukraine were leading producers of noble gases since the days of the Soviet Union, and jointly supplied about 30% of the chipmaking industry’s supply of neon gas.

Both countries were closely intertwined in their noble gas supply to the world. Russia produced raw neon gas as a byproduct of its steelworks, and sent it to Ukraine for purification. That ceased with the Russian invasion of Ukraine.

 

How Badly Will Russia Noble Gas Cut Affect Chipmakers?

Noble gases like neon, argon, xenon and helium are critical in the production of microelectronics that power everything from computers to smartphones and cars.

Neon, in particular, plays a critical role in the optical lithographic process used to etch patterns on silicon wafers, creating circuits in semiconductor chips.

The state-of-the-art excimer pulsed laser used to create semiconductors, for example, requires an argon-fluorine-neon mixture, up to 95% of which is made up of exceptionally pure neon gas.

That’s why about 70% of the world’s supply of neon gas (about 540,000 tonnes) is used by the semiconductor industry.

Fortunately, Russia’s decision to cut noble gas supplies may have less impact that they assumed, because chipmakers prepared for such an eventuality.

The semiconductor industry used to rely on Ukraine and Russia for about 80% to 90% of their neon gas supply, but they started diversifying their noble gas supplies after Russia invaded and annexed Crimea in 2014.

Over the last 7-8 years, they managed to cut down their dependence on Ukraine and Russia to about 30%. And the industry generally maintains gas reserves that would last 3-6 months.

China is the main beneficiary of reduced noble gas supply from Russia. Since the war started, Chinese noble gas producers said that their daily order enquiries have jumped 5X to 6X.

For now, the semiconductor industry does not need to reduce production, but the reduced market supply will mean noble gas prices will remain elevated for some time to come.

Needless to say – this will increase the cost of semiconductors, the cost of which will be passed onto consumers.

 

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Dr. Adrian Wong has been writing about tech and science since 1997, even publishing a book with Prentice Hall called Breaking Through The BIOS Barrier (ISBN 978-0131455368) while in medical school.

He continues to devote countless hours every day writing about tech, medicine and science, in his pursuit of facts in a post-truth world.

 

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