The Crisis in Ukraine Spells More Trouble for Semiconductor Supply

The crisis in Ukraine is the next tectonic disruption in an exhausting two-year span for the semiconductor industry — which was already significantly challenged by the COVID-19 pandemic and insufficient capacity to meet surging demand. This latest threat to semiconductor production may be the most significant yet: It is poised to send shockwaves rippling through a range of manufacturing sectors, including high tech, automotive, consumer electronics, and household appliances. The root of the issue is that Ukraine is a prime supplier of neon gas — which is required to operate the lasers used in the lithography phase, the heart of semiconductor fabrication. Without neon, chip production comes to an abrupt halt. The U.S. has historically sourced as much as 90% of the required semiconductor neon from Ukraine, which has also provided about 70% of the global supply. Ukraine is also a major supplier of xenon and krypton gases, also critical to chip manufacturing. 

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