Russia Ukraine War could affect the Semiconductor Chip Supply Chain

The ongoing war between Russia and Ukraine can affect the already stressed semiconductor supply chain. It happens when chip makers are struggling to keep up with the demand for chips in the computer and automotive sectors.

The COVID19 pandemic has affected the semiconductor chip supply chain. This led to a temporary factory closure, often due to a shortage of parts that caused consumer electronics prices to skyrocket, forcing car companies to significantly lower their production targets.

According to a report, Ukraine is one of the major suppliers of neon gas, which is used in the lithography stages of chip production. The analysts also say that the country has a 70% share in the global supply of neon. This could result in the price rise of tech products due to the increased cost of production of semiconductor chips. 

Not just the shortage of raw materials from Ukraine but Russia, which is also a key supplier of neon and palladium, a metal that is used for electronics, catalytic converters and other items. The new sanction against Russia could result in a shortage of Palladium and can force manufacturers to look for alternative sources.