Electronic chips, aka integrated circuits composed of transistors, resistors and diodes, are a key element of the world’s increasingly digital economy. They can be found in satellite dishes, cars, computers, farm machinery, mobile phones and airplanes, to name but a few. The chip itself consists of many complex layers of semiconductor wafers, copper and other required materials. It can contain billions of components in a tiny surface area made from a semiconductor material.
After provoking the war in Ukraine, the West discovers it has a problem, since Russia and Ukraine are supplying the two key raw materials required to produce chips.
“The Russia-Ukraine war could hit global supply chains that are already constrained due to the pandemic and the worst impact would be on the ongoing chip shortage because the warring nations control significant supplies of key raw materials that go into making semiconductors,” Moody’s Analytics warned in a report: “Russia controls as much as 44% of global palladium supplies, Ukraine produces a significant 70% of the global supply of neon — the two key raw materials that go into making chips.”
