Ukraine War Flashes Neon Warning Lights for Chips

Russia’s invasion of Ukraine by land, air and sea risks reverberating across the global chip industry and exacerbating current supply-chain constraints.

Ukraine is a major producer of neon gas critical for lasers used in chipmaking and supplies more than 90% of U.S. semiconductor-grade neon, according to estimates from research firm Techcet. About 35% of palladium, a rare metal also used for semiconductors, is sourced from Russia. A full-scale conflict disrupting exports of these elements might hit players like Intel, which gets about 50% of its neon from Eastern Europe, according to JPMorgan. ASML, which supplies machines to semiconductor makers, sources less than 20% of the gases it uses from the crisis-hit countries.