The White House is definitely warning the chip business to diversify its provide chain in case Russia retaliates against threatened US  export curbs by blocking entry to key materials, people acquainted with the matter said. The potential for retaliation has garnered more attention in recent days right after Techcet, a market research group, published a report on February  1  highlighting the reliability of many semiconductor manufacturers upon Russian and Ukrainian-sourced materials like neon, palladium, and more.

According to Techcet estimates, over 90 percent  of US  semiconductor-grade neon materials come from Ukraine, while 35 percent  of US  palladium is sourced from Russian federation.

Peter Harrell, who sits of the White House’s National Security Council, and his staff have been in touch with members of the nick industry in recent times, learning about their exposure to Ruskies and Ukrainian chipmaking materials and urging them to discover alternative sources, the people mentioned.

The Whitened House declined to discuss the specifics of the discussions, but a senior recognized reiterated that the administration has been prepared if Russia invaded Ukraine.

“Part of that is working with companies to make sure that if Russia takes actions that interfere with provide chains, companies are prepared meant for disruptions, ” the person mentioned.

“We understand that other sources of key items are available and stand ready to work with our companies to help them identify and diversify their supplies. ”

Joe Pasetti, vice president of global open public policy at the chip plus electronics manufacturing suppliers team SEMI, sent an email to members this week gauging exposure to the vital chipmaking materials, according to a copy obtained by Reuters.

“As discussed on this call, please see the attached document… regarding Russian/Ukrainian manufacturing of a number of semiconductor components, ” he wrote, referencing a summary by Techcet on C4F6, Palladium, Helium, Fluorescents and Scandium from the troubled region. “Please let me know if potential supply disruptions to any of them are a concern for the company. ”

Neon, critical for the lasers used to make chips, is really a biproduct of Russian metal manufacturing, according to Techcet. It really is then purified in Ukraine. Palladium is used in detectors and memory, among additional applications.

The particular Biden administration has vulnerable to impose sweeping export controls against Russia if it invades Ukraine. Russia, which has massed over 100, 500 troops along Ukraine’s border, denies it plans in order to attack.

Several chipmakers have been reviewing their supply chains to check potential fallout from turmoil in Ukraine. One person at a chipmaking company who dropped to be named acknowledged that it has been looking into its flow of neon and other gases, many of which originate in Ukraine.

“Even if there was clearly a conflict in Ukraine it wouldn’t cut off provide. It would drive prices up, ” the person said. “The market would constrict. Those people gases would become pretty scarce. But it wouldn’t cease semiconductor manufacturing, ” he or she added.

Based on one power chip style startup executive, unrest within Ukraine has caused rare gas prices to increase and may cause supply issues. Fluorine is another gas that has a huge supply from that part of the world and could be affected, the executive added.

William Moss, a spokesperson for Intel , said the chipmaker was not anticipating any impact to neon supply.

But the issue is still concerning, because worldwide chip supplies are tight and chip orders are just expected to pick up. Techcet estimates demand for all the materials may rise by more than thirty seven percent  over the next four years, pointing to latest announcements by Intel, Samsung , and Taiwan’s TSMC in Kansas, Arizona and Texas.

Neon prices increased 600 percent  in the runup to Russia’s 2014 annexation of the Crimean peninsula from Ukraine, since chip firms relied on a few Ukrainian companies, according to the US  International Trade Commission.  
© Thomson Reuters 2021


Whitened House tells Chip Business to Brace for Ruskies Supply Disruptions