Chip firms play down Ukraine war supply fears


BARCELONA: The tech business is enjoying down fears of widespread uncooked supplies shortages because of the war in Ukraine, after reviews that chipmakers would face a extreme crunch.

Russia and Ukraine are key suppliers of neon, a fuel used within the lasers that etch microscopic patterns on to tiny slivers of silicon.

Russia additionally provides palladium, which has a number of makes use of in digital parts.

The sector has already been hit exhausting by a scarcity of parts for chipmaking, blamed on a growth in international demand for digital merchandise and disruption to supply chains attributable to the pandemic.

But on the Mobile World Congress in Barcelona, one of many sector’s greatest get-togethers, business figures had been bullish.

“We only use a small amount of neon gas. And less than 20% of that small amount is sourced from Ukraine and Russia by our supplier,” stated Monique Mols of Dutch agency ASML, including that they had been trying into various sources.

While automakers and a few elements of the IT sector have been exhausting hit by pandemic-induced shortages, smartphone makers have weathered the storm slightly higher.

Research group IDC stated cellphone gross sales fell by 3.2% within the fourth quarter final 12 months, and large manufacturers have been compelled to delay product launches.

But the likes of Apple and Samsung are nonetheless posting huge earnings.

“The situation remains very complicated for the entire sector – we will have to be patient,” stated Ariane Bucaille, a specialist within the semiconductor market at Deloitte.

‘There will be an impact’

Should the supply chain be additional disrupted, analysts imagine extra merchandise may very well be delayed and costs might rise, affecting all the sector.

“Ukraine is a major supplier of raw material gases for semiconductors including neon, argon, krypton and xenon,” stated Taiwanese analysis agency TrendForce.

“Although the proportion of neon gas used in semiconductor processes is not as high as in other industries, it is still a necessary resource. If the supply of materials is cut off, there will be an impact on the industry.”

Marina Koytcheva of CCS Insight agreed that the tech business was “unlikely to remain sheltered from the impact of the crisis in Ukraine”.

Whatever the influence of the Ukrainian disaster, a fast return to regular is unlikely.

Even earlier than the war broke out, US financial institution JP Morgan reckoned the scarcity of semiconductors was prone to proceed by means of 2022, and Deloitte anticipated no enchancment till 2024.

‘Complex technologies’

But the business is extra sanguine concerning the rapid results of the war on their supply strains.

US chipmaker Intel has already stated it didn’t anticipate the war to trigger any disruption, and laptop reminiscence agency Micron stated it sourced its noble gases and different minerals from throughout the EU, US and Asia.

Semiconductor business group SIA careworn that there was “a diverse set of suppliers of key materials and gases”.

“So we do not believe there are immediate supply disruption risks related to Russia and Ukraine,” it stated in an announcement.

Of the longer-term prospects, actions communicate louder than phrases, and a number of other large firms – Samsung and TSMC amongst them – have introduced large investments in new factories to diversify manufacturing.

But Ariane Bucaille warns that these investments are prone to take two or three years to bear fruit.

They contain “complex technologies”, she warned, which means the firms might want to discover “an extremely skilled workforce”. – AFP

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