The supply chain of Taiwan’s small and medium-sized semiconductor chipmakers could be interrupted by an escalation in tensions between Russia and Ukraine, two key suppliers of raw materials, an analyst said on Sunday.
Ray Yang (楊瑞臨), consulting director at the Industry, Science and Technology International Strategy Center of the Industrial Technology Research Institute (工業技術研究院), said that the tensions might lead to a reduction of critical raw materials exported from Russia and Ukraine for chip manufacturing.
Materials possibly affected include palladium, neon and C4F6, having been mentioned earlier this month in a report by Techcet, a US-based advisory firm that focuses on the materials market supply chain and technologies for electronic device markets.
Techcet said that palladium is used in sensors and emerging memory technology, as well as plating material for some packaging technologies, while neon is used in the manufacturing of lasers, often used for lithography.
C4F6 is used in advanced node logic device etching and advanced lithography processes for chip production, the report said.
Large companies such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) might be able to secure supplies of those key materials, but smaller chipmakers might not be so lucky, Yang said.
The Taiwanese semiconductor sector might need to find new solutions to supply-chain problems if the Russia-Ukraine situation impedes exports, he said.
Joe Pasetti, vice president of global public policy at the chip and electronics manufacturing suppliers group SEMI, last week sent an e-mail to members to gauge exposure to vital chipmaking supplies, Reuters reported.
“As discussed on today’s call, please see the attached document ... regarding Russian and Ukrainian production of a number of semiconductor materials,” he wrote, referencing a summary by Techcet on supplies of C4F6, palladium, helium, neon and scandium from the troubled region.
“Please let me know if potential supply disruptions to any of them are a concern for your company,” he added.
Some chipmakers have been reviewing their supply chains to look for any potential fallout from the conflict in Ukraine.
An employee at a chipmaker said on condition of anonymity that their firm had been looking into its supply of neon and other gases, some of which originate in Ukraine.
“Even if there is a conflict in Ukraine, it wouldn’t cut off supply. It would drive prices up,” the person said. “The market would constrict. Those gases would become pretty scarce, but it wouldn’t stop semiconductor manufacturing.”
An executive of a power chip design start-up said that unrest in Ukraine has caused the prices of rare gases to increase and could cause supply issues.
Fluorine is another gas that is largely supplied by that part of the world and could be affected, the executive added.
Intel Corp spokesman William Moss said that the chipmaker does not anticipate an impact on the neon supply.
However, there is concern about global chip supplies being tight as orders are only expected to rise.
Techcet estimated that demand for all materials is to rise by more than 37 percent over the next four years, citing announcements by Intel, Samsung Electronics Co and TSMC.
This story has been modified since it was first published, which incorrectly stated Ray Yang's title.
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