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Russia and Ukraine play an important role in the supply chain, while US sanctions on technology, if introduced, will also cause turmoil throughout the industry.

According to Gizchina, Russia and Ukraine are not the countries with the leading technology development, but they play a large role in the supply. In which, Ukraine provides neon gas for semiconductor production. Russia is one of the largest miners of nickel ore - the main raw material for the production of electric vehicle batteries, moving equipment that will replace the very popular internal combustion engine.

Ukraine is supplying the United States with more than 90% of semiconductor neon gas, a key ingredient for lasers used in chipmaking. Neon gas is also a by-product of the Russian steel industry and is refined in Ukraine, according to market research firm Techcet. Currently 35% of palladium in the US comes from Russia, used mainly in the production of sensors and memory. Russia also accounts for 45% of the global palladium supply.

Joanne Chiao, senior analyst at market research firm TrendForce, said that Russia is not currently one of the main markets for the chip foundry industry. However, the Russia-Ukraine conflict may cause the price of raw materials to increase, leading to an increase in the price of the end product. Since the conflict between Russia and Ukraine escalated in December 2021, the price of palladium has increased by 52%. In the past, the cost of producing neon lights increased by 600% overnight when Russia annexed Crimea in 2014.

 

Ukraine controls 70% of the world's neon gas, an important chip material

 

In addition to processing chips, the technology world is also waiting for a response from Russia when it holds a large amount of nickel mining. If supply is disrupted or prices go up, EV batteries will either become scarce or increase in price, directly affecting the global electric vehicle market, which grew by 122% year-to-date in 2019. 2021.

Meanwhile, according to Fortune, the US may be working on a round of sanctions by restricting Russia's access to semiconductors manufactured by US technology. This could be a blow to the Russian technology industry, as modern devices such as cars, smartphones or rockets depend on semiconductors for supplies.

However, American industry leaders are still cautious when it comes to the ban, saying that using chip national power against Russia will put the entire industry in "unvisited waters". probe". "We are still trying to assess the impact on the global supply chain," the American Semiconductor Industry Association said in a statement when the White House first raised the possibility of weaponizing the US chip supply in January.

Experts say that in the short term, the US ban, if applied, will cause Russia to find countermeasures. In the long run, this move could even backfire and completely weaken the advantage in the US chip industry if Russia cooperates more deeply with China. Fortune said the US is studying options to cut semiconductor supplies to all Russian businesses or only to some companies related to the military or industries that the country considers vital.