Showing posts tagged 'chip production'
16 March 2022
Ukraine - Russia conflict may increase global electronics shortage
Due to conflict between Russia and Ukraine, both of whom produce essential products for chip fabrication, the electronic component shortage across the globe may worsen.
Ukraine produces approximately half of the global supply of neon gas, which is used in the photolithography process of chip production. Russia is responsible for about 44% of all palladium, which is implemented in the chip plating process.
The two leading Ukrainian suppliers of neon, Ingas and Cryoin, have stopped production in Moscow and said they would be unable to fill orders until the fighting had stopped.
Ingas has customers in Taiwan, Korea, the US and Germany. The headquarters of the company are based in Mariupol, which has been a conflict zone since late February. According to Reuters the marketing officer for Ingas was unable to contact them due to lack of internet or phone connection in the city.
Cryoin said it had been shut since February 24th to keep its staff safe, and would be unable to fulfil March orders. The company said it would only be able to stay afloat for three months if the plant stayed closed, and would be even less likely to survive financially if any equipment or facilities were damaged.
Many manufacturers fear that neon gas, a by-product of Russian steel manufacturing, will see a price spike in the coming months. In 2014 during the annexing of Crimea, the price of neon rose by 600%.
Larger chip fabricators will no doubt see smaller losses due to their stockpiling and buying power, while smaller companies are more likely to suffer as a result of the material shortage.
It is further predicted that shipping costs will rise due to an increase in closed borders and sanctions, and there will be a rise in crude oil and auto fuel prices.
The losses could be mitigated in part by providing alternatives for neon and palladium, some of which can be produced by the UK or the USA. Gases with a chlorine or fluoride base could be used in place of neon, while palladium can be sourced from some countries in the west.
Neon could also be supplied by China, but the shortages mean that the prices are rising quickly and could be inaccessible to many smaller manufacturers.
Neon consumption worldwide for chip production was around 540 metric tons last year, and if companies began neon production now it would take between nine months and two years to reach steady levels.
16 February 2022
The European Chips Act and its impact on electronic component sales
Semiconductors are vital for our day-to-day life. They are in all the electronics you own but are also in your kitchen appliances, your car, your electric shower and many more. But what if we lost access to these components?
The huge reliance on imported semiconductors was made abundantly clear last year. Europe’s current share of the global semiconductor market is only about 10%, and the continents is otherwise dependent on supply from abroad.
The need for independence and autonomy in the European chip market has been made very apparent due to factors like Brexit and COVID-19.
The European Chips Act was first mentioned in the EU’s 2021 State of Union Letter of Intent, calling the act a key initiative for 2022. The EU created the Industrial Alliance for Processors and Semiconductor Technologies alongside it, to plan and oversee progress on the act.
One of the aims of the alliance is to increase Europe’s share in global chip production to 20% by 2030, but they will first have to identify issues with the market and map out a way to improve design and production.
During the ‘State of the World’ Special Address by European Commission president Ursula von der Leyen on January 20, the chips act was mentioned once again, and they announced draft legislation for the chips act is due in February of this year.
The European Commission president said that there would be five steps taken to improve the chip sector, and that they would focus on research first, then design and manufacturing. After these there would be an adaptation of state aid rules to increase provisions in case of shortage. Lastly, she said the EU would work to support smaller, innovative technology companies.
In 2020 the United States accounted for the largest share in the semiconductor industry, with 47%. Following the US was South Korea with 20% of the market. China’s share has also increased quickly in recent years, putting it narrowly behind Korea. Despite Japan previously having a larger share in the market, they are currently on equal footing with Europe with a share of around 10%.
Despite no longer being a member of the EU, and therefore not directly signing the Chips Act, the UK could also have the potential to increase its standing in the global semiconductor race.
According to some UK-based chipmakers, the country has an advantage in the area of research and development. If research facilities like the University of Manchester were given the right attention and funding, they could develop sustainable resources like graphene to replace mined silicon in processors.
The UK electronics sector will always be considerably smaller than huge countries like China and America, but with significant investment they would have the ability to make a difference in the current chip shortage. And Cyclops is a perfect example of a smaller company making a big difference.
Cyclops is an electronic component distributor with a wealth of contacts from all over the world. With unrivalled stock and suppliers, Cyclops will put you ahead of your competitors. Contact us today at email@example.com.
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