Most Read
Image 01 Image 02 Image 03

Shortages of Neon, Other Rare Gases Likely in Wake of Russia Limiting Exports

Shortages of Neon, Other Rare Gases Likely in Wake of Russia Limiting Exports

Semiconductor chip shortage likely to follow in its wake.

In response to sanctions, Russia has limited exports of noble gases that are critical to making semiconductor chips, at least until the end of 2022.

Russia’s export curbs could worsen the supply crunch in the global chips market. Ukraine was one of the world’s largest suppliers of noble gases until it suspended production at its plants in the cities of Mariupol and Odesa in March.

Exports of noble gases, which Russia used to supply to Japan and other countries, will be allowed only with special state permission until Dec. 31, the Russian government said on May 30.

The move will provide an opportunity to “rearrange those chains that have now been broken and build new ones,” Deputy Trade Minister Vasily Shpak told Reuters via the ministry’s press service on Thursday.

Noble gases are inert, non-reactive gases (e.g., neon, helium, xenon). Their outer atomic shells are filled with electrons, so they are stable by themselves.

They are essential for semi-conductor work, because that work involves materials that are highly reactive and readily ignitable. It allows the reactions to occur in a controlled, stable atmosphere.

The semiconductor chips have already been in short supply. This development will make the situation worse.

All three gases are used to produce the tiny electronic chips found in a raft of consumer products, from smartphones to washing machines to cars, and which have been in critically short supply for months.

…The export limits come just as the semiconductor industry, and its customers, were beginning to shake off the worst of the supply crisis. Last year, carmakers built 10 million fewer vehicles because of the chip shortage, according to LMC Automotive, but supplies were expected to improve in the second half of this year.

“What we don’t need, obviously, is another drama with the chip supply that could affect and perhaps stall a recovery,” said Justin Cox, director of global production at the automotive consultancy.

He told CNN Business that neon export limits were “worrying,” but had not taken chipmakers by surprise. After Russia annexed Crimea from Ukraine eight years ago, the industry had been preparing for further supply disruptions from the region, he said.

The move will also likely escalate the rate of inflation for any product relying on chips.

It is difficult to track the price of neon and other gases, because most are traded under private long-term contracts, Sundqvist said. But Techcet estimates that neon contract prices have already increased fivefold since the invasion earlier this year, and will remain at those elevated levels in the near-term.

“[Russia’s export limits] will definitely have an impact on any new contracts,” Sundqvist said.

South Korea, home to giant chipmaker Samsung, will feel the pain first, he added, because it is reliant on noble gas imports and — unlike the United States, Japan and Europe — lacks big gas companies which could ramp up production.

American research facilities have already been impacted as well.

…. In physics, engineering, chemistry, biology, and medical research, helium and liquid helium are employed whenever cold environments are needed for experiments, including cooling large magnets, MRI machines, or mass spectrometers, or slowing down atoms in condensed-matter physics research. Some 16 Nobel Prizes have been generated by work done using liquid helium, showing how much of a workhorse it has become in these fields because of distinct characteristics of both the gas and liquid.

At Harvard, researchers may have to shut down pieces of expensive technical equipment that rely on helium and liquid helium, the super cold liquid version of the gas. In some cases, this could cause irrevocable damage to the instruments and force some of the scientists to bring lines of research to a halt. Some ripple effects could include graduation delays for students whose thesis work depends on those projects.

“We are already in that worst-case scenario,” said FAS Dean of Science Christopher W. Stubbs. “The supply has been cut in half, so half of the experiments that rely on liquid helium have been shut down as a result. This impedes progress on both the scientific and educational aspects of our division.”

DONATE

Donations tax deductible
to the full extent allowed by law.

Comments

Russia is rebuilding their evil empire.

    CommoChief in reply to geronl. | June 26, 2022 at 8:32 pm

    It would be more accurate to describe these moves by Russia regarding their products critical to modern life as a reshuffling of supply chains away from the Nations who are pushing the goals of the WEF and those who seek to use the western militaries as enforcers of the global rule based order.

      randian in reply to CommoChief. | June 26, 2022 at 10:15 pm

      No, this aids the goals of the WEF. Klaus Schwab explicitly named Putin (as well as Justin Trudeau and Jacinda Ardern) as part of his Young Global Leaders program.

        CommoChief in reply to randian. | June 27, 2022 at 8:32 am

        How does an economically weakened EU help the goals of Davos? When the more financially stable and productive and northern members are unable or worse yet become unwilling to continue subsidies to prop up the southern members the project will begin to collapse.

        The whole notion of an international rules based order only works when everyone is willing to play. The Nations outside the EU and NATO get the short end of the stick under the Davos vision.

        This neo mercantilism isn’t popular outside the west. Even within the west it is opposed; Brexit and MAGA. In particular the populist right in middle America has seen the results devastate their communities. That’s why DJT got elected because the system doesn’t benefit average people.

I thought the U.S. was a major source of helium?

Of course that was probably in Hindenburg days and before the Clintons likely sold our industry to the Russians.

Who cares about chips. The article did not even mention the impact on the party store business, if there are no more helium balloons. /s

chrisboltssr | June 27, 2022 at 11:01 am

Are Americans beginning to see the limits of “free trade”? Probably not. Our political betters have spent decades destroying the American economy in the names of “free trade” and “climate change” and now we’re beholden to the trade practices of Russia and China.

You have to go to college to do something this monumentally stupid.

    lichau in reply to chrisboltssr. | June 27, 2022 at 3:36 pm

    The “real” economy is growing potatoes and making shoes. Not managing hedge funds.

    The US has given up on producing anything.

    Buckle your seatbelts. It is going to be a hard landing.

Weird. The entire world seems to be grinding to a supply chain halt as if the only place in the world where the majority of commodities are exported from are Russia and Ukraine.

What are your thoughts, Klaus Schwab?

Neon is a component of air. Producing it by fractional distillation of liquid air is straightforward–that is how it was discovered. As I understand, the Russians produce it as a byproduct of steel production–as it is found in the earth’s crust. But, there is nothing whatsoever preventing us from distilling it. Other than the problem of getting such a plant permitted in the US.
We can fix this anytime we want to. “Want” being the operative word.

One major gas supplier in the US has already indicated that they have no helium