Electronics Vendors Might Use Ukraine Conflict As An Excuse to Raise Prices
How will the Russian invasion of Ukraine affect the global supply chain? The good news is that the US chip industry seems insulated from the conflict for now. But the war may become a reason —whether legitimate or not— for electronics vendors to hike up costs.
“It would not surprise me if companies say 'Due to the conflict we are raising prices,'” said Shawn DuBravac, chief economist for the electronics manufacturing trade group the IPC.
The conflict is already sparking worries it could disrupt semiconductor production because Ukraine and Russia are top suppliers of neon gas, which is used in the lasers for chip manufacturing. Russia is also a major producer of Palladium, a rare metal used in computer components, sensors and fuel cells.
However, it seems chip makers have found ways to source their neon gas elsewhere. “The semiconductor industry has a diverse set of suppliers of key materials and gases, so we do not believe there are immediate supply disruption risks related to Russia and Ukraine,” said the Semiconductor Industry Association, which counts AMD, Nvidia and Qualcomm as members.
Intel added: “We do not anticipate any significant impact to our supply chain. Our strategy of having a diverse, global supply chain minimizes our risk for potential local interruptions.”
According to DuBravac, last year the US imported about 45 percent of rare gas supplies, including neon, from Russia and Ukraine. The remaining imports came from China, Germany and France. So those countries could continue to supply the US in the event neon supplies from Russia and Ukraine are cut off. Other trade partners might also respond by establishing their own neon production.
But the bigger concern is that the conflict will become a
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