Russia Invasion Halts Half of Neon Output for Chips

Russia’s invasion of Ukraine has further aggravated the global shortage of semiconductors, also known as microchips. Part of that disruption involves the manufacturing of a key ingredient needed to make the chips: neon gas.

Before the invasion, Ukraine produced around 50 percent of the world’s semiconductor-grade neon gas, accounting for more than 90 percent of the neon used by American chip manufacturers. The gas is critical for the lasers used to make chips. According to market researcher Techcet, global neon consumption for chip making reached nearly an estimated 600 tons last year.

But Ukraine’s two leading neon suppliers have halted operations since February.

As a result, the world will be more reliant on the globe’s other two major suppliers—Russia and China.