Ukraine crisis to worsen global chip shortage

KUALA LUMPUR: The ongoing Ukraine crisis poses a serious threat to the lives of many innocent individuals, which in fact is far worse than any situation one can experience in a lifetime. Our hearts go out to all those stuck in this unfortunate situation.

Also, crises of such nature impact global trade, and this time car manufacturing would be severely affected. Why? Well, that’s because Ukraine supplies a critical raw material used to manufacture microchips, the shortage of which will have a toll on new car manufacturing.

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This critical raw material is none other than neon, a component used to operate lasers required to make microchips. It is a well known fact that the storage of microchips is a hard hit reality that has had a negative impact on the auto industry and now the Ukraine crisis will only push the situation into a more challenging position.

Ukraine provides 70 percent of the world’s neon which is all gone at the moment. Also, Russia is a large producer of the same, however, trade is restricted with it at the moment, leaving the world and the auto industry in a pickle.

The chip manufacturers are rumored to be stockpiling neon as the current situation with Ukraine seemed almost inevitable. Meaning there won’t be an immediate effect on chip production, however, if the situation doesn’t improve there would definitely be an impact on the supply of new cars and other products that use microchips.

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