Global Chip Shortage Looks to Get Worse

The chip industry had already hit the headlines last year when demand for chips rose rapidly following the relaxation of the COVID 19 measures, but the market was unable to restore supply chains as quickly. As a result, there was a global chip shortage. Now a new chip shortage is looming, but the cause lies elsewhere.

Iceblick is a Ukrainian gas producer that produces, among other things, the gas neon. Neon in its purest form (99.999%) is used in special lasers that require neon for the production of microchips. Iceblick produces about 65% of the neon used in the chip industry worldwide. The current war in Ukraine is now threatening a supply shortage of neon, which would exacerbate the global microchip shortage. This would have a particularly serious impact on the technology sector, e.g. the automotive, aerospace, and consumer electronics industries. Argon fluoride lasers, which generate light with a wavelength of 193 nanometers, are used to manufacture microchips. The lasers use the gases argon, fluoride, and neon to laser the circuit pattern on the silicon wafers. Neon is used as a buffer gas and therefore has the largest share at 96 %.

In total, Ukraine produces about 70% of the global neon.

At the moment, however, chipmakers can still fall back on stocks, industry experts say. It is said that manufacturers have about 8 weeks of stock. If the diplomatic agreement drags on, there could actually be a further shortage.

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