The current crisis, which highlights tensions between Russia and Ukraine, could also be read from another angle. Without wishing to be conspiratorial, a few years ago, if the Iraq-Kuwait crisis could be analyzed from the point of view of the risks in terms of oil supply, it is not completely useless to look at the current situation from a similar point of view.
In the last few days, a public report has gone more or less unnoticed, but its content could also shed a different light on the issues at stake in the current crisis. This report, published on February 1, highlights the dependence of many semiconductor manufacturers on materials of Russian and Ukrainian origin.
Strong US dependence on materials from Ukraine
The report shows that more than 90% of the world’s supply of semiconductor-grade neon (Ne 10) comes from Ukraine. This is necessary for the manufacture of chips in the context of deep ultraviolet lithography (DUV) and extreme ultraviolet lithography (EUV) techniques. A conflict that affects the production and extraction of these gases could lead to a new shortage of semiconductors and a significant price increase in the short term. But it doesn’t stop there, as Ukraine and Russia are also an important source of palladium (Pd 46), hexafluoro-1,3-butadiene gas (C4F6), which is needed for semiconductor etching. Palladium in particular is needed for the production of random access memory (NAND flash). In the current market, Russia and Ukraine account for 30% of the total supply. It may not all come down to economics and more particularly to what is happening in terms of shortage / dependence of the rest of the world in semiconductors, but this insight does not seem to be useless in understanding the issues of this crisis.
