…to adjust our supply chains, especially the beginning points of them in this case.
Palladium and neon gas are seriously needed for chip production, and Russia’s invasion and attempt to conquer or destroy Ukraine is about to have a major effect on the supply of those items if nations and businesses don’t make the required adjustments.
Russia and Ukraine produce 40% to 50% of semiconductor-grade neon, according to market-research firm Techcet CA LLC. Largely derived from steel manufacturing, neon gas is used in lasers that help in the design of semiconductors.
Approximately 37% of the world’s palladium production comes from Russian mines, according to Techcet, and the metal is used in sensor chips and certain types of computing memory.
As a follow-on, palladium at least might be sourced from the People’s Republic of China, expanding that nation’s influence over the economies and national security of the US and the nations of Europe.
However expensive the shift will be, changing to other sources are critical to security. The PRC notwithstanding, South Africa is nearly as large a palladium producer as Russia. The US can produce our own neon gas either directly, or as a byproduct of steel production with further refinement for use in chip production.
It’s not only production of palladium and neon that matters, though. Currently, the PRC is the major producer of finished chip components and of finished chips themselves. That, also, needs to change, and other producers of chips and components need to be found, and producers need to be developed domestically.
In any event, there’s also little reason to go back to buying either of these from Russia, even if it is driven out of Ukraine. So long as the current men and women of the Russian government—at all levels—remain in place, that nation cannot be trusted with anything.