Chip production in danger: Ukraine halts neon gas production
The problems caused by the war between Russia and Ukraine continue, this time the microchip sector is affected. The two companies that sell high-purity neon gas in the world come from Ukraine.
Due to the effects of the war, these companies have been forced to stop their activities. Ingas and Cryoin produce about half of the neon gas consumed in the electronics industry.
The exit of these two companies from the market could cause a huge crisis in the sector. This could exacerbate the shortage of microchips, which would also cause a shortage of electronic devices and an inevitable increase in their prices.
Ingas and Cryoin produced about 50% of the world's supply
As it has been known, between these two companies they covered around 50% of the entire supply of high purity neon gas. When these two companies leave, the price of neon gas will inevitably increase, which ends up affecting the entire industry.
Even if its main competitors increase their production to try to fill the gap, the certain thing is that there will be a great shortage.
Before the Russian invasion of Ukraine began, these two companies produced between 25,000 and 35,000 cubic meters of high-purity neon gas. These companies sold their product to countries such as Taiwan, China, Germany, the United States, and South Korea, where they were the main suppliers.
The semiconductor crisis worsens
Let us remember that since the start of the pandemic a couple of years ago, the technology sector has been going through a serious crisis. This has been known as the semiconductor crisis, which has caused companies to be unable to produce equipment in the quantities they want.
We have seen this in cases such as video game consoles since the consoles that are produced cannot keep up with the demand. This is caused by low production because there are not enough microchips to supply the market.
With the closure of these two companies in Ukraine, this crisis will only worsen, causing the number of microchips to be even lower. This not only affects companies that manufacture electronic devices but also consumers.
Although many microchip manufacturers indeed have reserves of neon gas, these could be exhausted in a short period. So, in a couple of months, we could be seeing the main effects that this has.