Crimea Invasion Prepared Chip Industry for Russia’s War Against Ukraine

By Leslie Stimson, Inside Towers Washington Bureau Chief

Almost two years of chip shortages have had an unexpected upside for the semiconductor industry (and telecom’s use of those chips): It’s better prepared to manage the turmoil caused by Russia’s invasion of Ukraine. Production of vital raw materials for chip making is concentrated in Russia and Ukraine. The countries are a major source of both neon gas, needed to feed lasers that print minute circuitry onto silicon, and the metal palladium used in later manufacturing stages, reports The Wall Street Journal. About a quarter to a half of the world’s semiconductor-grade neon comes from Russia and Ukraine, while roughly a third of the world’s palladium is sourced in Russia, analysts and industry consultants estimate. A potential shortage of those materials has sparked concern among some analysts that an industry already struggling to meet hot demand could suffer a blow to production. Those worries might not be realized in the near term, in part because the industry has reset how it operates. It had to pivot after being whipsawed by pandemic-era demand and repeated shocks such as fires at chip plants, drought in Taiwan, other setbacks and global supply-chain disruptions. Continue Reading