According to a report by the Moody’s Analytics, the Russian invasion of Ukraine may worsen the global semiconductor chip shortage. Due to attacks, exports from Ukraine have stopped as flights being grounded and major ports being under attack or occupied. Besides, sanctions on Russia will also reduce the exports.
Salient features of report
- Ukraine is a critical supplier of rare gases like neon which is used in the production of semiconductor fab lasers.
- Russia is a key supplier of rare metals like palladium.
- Rare metals like palladium are often used as alternatives for gold plating due to their conductivity, resistance to corrosion, and high malleability in the semiconductor industry.
- Russia is the world’s largest producer of palladium, the second-largest producer of platinum, and produces nearly 80 percent of all European gold.
Not the first time
- This is not the first time that the semiconductor industry would face supply chain issues caused due to Russia’s aggressive actions.
- The industry had to deal with a severe jump in prices of gases and metals post 2014 Crimean crisis, when Russia had been sanctioned and Ukrainian supply logistics faltered.
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