The impact of the Ukraine-Russia war on technology may be greater than thought. How will the chip crisis be affected by the war in Ukraine and Russia?
The ongoing war between Ukraine and Russia is likely to negatively affect the tech world. The chip crisis, one of the biggest problems of the past few years, could get worse because both countries are exporters of raw materials used in chip production. What will the Impact of the Ukraine-Russia war on technology have?
Reports ahead of the Russia-Ukraine war said the problem of semiconductor chips could end by 2023. The U.S. Commerce Department’s report on the semiconductor supply chain, for example, estimated that worldwide chip shortages would last into the last quarter of 2022 and into 2023.
The impact of the Ukraine-Russia war on technology
Companies and industry experts assessing Russia’s invasion of Ukraine are concerned that the shortage of chips could drag on. Both Russia and Ukraine have palladium used in memory and sensor chips and neon gas used in circuit designs, prompting firms to make new plans.
Industry experts said events that adversely affect technology, such as the ongoing war in Ukraine, could potentially lead to greater strain on supply chains, including reducing chip capacity and increasing prices.
“Under normal circumstances, the global shortage of semiconductor chips, which is expected to end in 2023, could be exacerbated by the current Russia-Ukraine tension,” said Pallavi Singh, Vice President of Super Plastronics Pvt Ltd, a socket manufacturing company in India.
Chipset factories in the Asian market said semiconductor stocks were down almost 50 percent following a global chip shortage. This crisis, which affects different sectors from automobiles to white goods, is pushing stocks down and prices up.
Prabhu Ram, Head of Industry at Industry Intelligence Group, another socket manufacturing company, warned the market, noting the raw material importance of Ukraine and Russia:
“Both Ukraine and Russia play a very important role in the global semiconductor supply chain. Ukraine is an important source and supplier of raw materials, including neon, which is used in semiconductor production, for example. Similarly, Russia is the source of palladium used in many memory and sensor chips.”
Intel CEO Pat Gelseger recently said he doesn’t expect the shortage of semiconductors to end until 2023. “We are in the worst shape at the moment, but by next year we will gradually get better. It is not possible to achieve the supply-demand balance until 2023.”