Supply-Chain Threats from Russia-US Tensions

Can Dependencies on Russia Materials Impact US Chip Production?

San Diego, CA, February 1, 2022: TECHCET addresses the Supply-Chain Threat from Russia-US turmoil—as the threat of war from Russia on Ukraine wears on, the potential for materials supply interruption is now a concern. TECHCET analysts have uncovered US dependencies on Russian C4F6, Neon, and Palladium, critical materials used to make semiconductor chips.

Russia is a crucial source of C4F6 which several US suppliers buy and purify for use in advanced node logic device etching and advanced lithography processes for chip production. The US market consumes about 8MT of C4F6 per year.

US Neon supply, used for laser gas (needed for lithography), is almost entirely from Ukraine/Russia. Russia produces Neon, a byproduct of steel manufacturing. This Neon is then sourced and purified by a specialized Ukrainian company.

Russia is also a key Palladium (Pd) supplier, along with South Africa, and supplies approximately 33% of the global demand. Palladium is used in sensors and emerging memory (MRAM), and as a plating material for some packaging technologies. Pd is primarily employed as a catalyst, and is especially important for automotive emission systems.

If the conflict escalates, and/or if the US imposes more sanctions on Russia, could Russia retaliate by withholding critical materials needed for US chip production? TECHCET’s CEO/President Lita Shon-Roy states, “The answer is YES—because the conflict may impede exports from Ukraine, Neon supply would be immediately impacted.” Moreover, C4F6 and Palladium exports that come directly from Russia could also be affected and used as leverage against trade sanctions. Shon-Roy adds, “We hope it will not come to that, however, if the current situation escalates, US chip makers may suffer material supply interruptions.”

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ABOUT TECHCET:  TECHCET CA LLC is an advisory services firm focused on process materials supply-chains, electronic materials business, and materials market analysis for the semiconductor, display, solar/PV, and LED industries. Since 2000, the company has been responsible for producing the Critical Material Reports™, covering silicon wafers, semiconductor gases, wet chemicals, CMP consumables, Photoresists, and ALD/CVD Precursors. The Critical Materials Council (CMC) of semiconductor fabricators is a business service offered by TECHCET, and includes materials supplier Associate Members. For additional information about reports, market briefings, CMC membership, or custom consulting please contact info@cmcfabs.org, +1-480-332-8336, or go to www.techcet.com