Since Ukraine is a major supplier of semiconductor raw gas in the world, of which Ukraine accounts for nearly 70% of the global production of neon gas, the situation between Russia and Ukraine also affects the stability of the global semiconductor industry chain.

A spokesman for lithography giant ASML said that it was looking for other sources of neon supply to prevent supply interruption caused by the conflict between Russia and Ukraine. Micron Technology, an American computer storage chip manufacturer, said on Tuesday (22nd) that the escalation of the crisis in Ukraine highlighted the complexity and vulnerability of the semiconductor supply chain. Some gases used for chip production came from Ukraine.

On February 24, wind data showed that the domestic chip index fell 2.25%, but the domestic electronic special gas concept stocks Huate Gas and Camry Gas rose in the afternoon. Some institutions believe that the increasingly complex situation in Russia and Ukraine may impact the supply of inert gas in the region. Although the production line will not be interrupted in the short term, the reduction of gas supply will still cause price rise, and the production cost of semiconductor may rise.

A variety of semiconductor raw materials are subject to short-term or impact

Electronic special gas is known as the blood of modern electronic industry, mainly used in semiconductor, liquid crystal display, crystalline silicon solar cell, optical fiber and other fields.

According to Linx Consulting, the demand for electronic special gas in the semiconductor market accounts for about 70%, and the demand for LCD and crystalline silicon solar cells accounts for 20% and 4% respectively. Among them, there are more than 100 kinds of electronic special gases required in semiconductors, which are widely used in all aspects of their production processes. According to SEMI data, the global wafer manufacturing material market size in 2019 was about 32.8 billion US dollars, of which the electronic specialty gas size was about 4.3 billion US dollars, accounting for 13%, and was the second largest consumable after silicon wafers.

As a major supplier of semiconductor raw gas in the world, Ukraine is a major supplier of neon, argon, krypton, xenon and other gases, and the supply of neon is the global market leader.

On February 1, the market research agency Techcet released a report showing that the global supply share of Ukraine's neon (Ne) reached 70%, while the global supply share of krypton (Kr) and xenon (Xe) reached 40% and 30% respectively. These rare gases can be used in the production of quasi-molecular laser light sources and semiconductor etching in ArF and KrF lithography machines respectively, mainly for the mature process of 250-130nm of 8-inch wafers.

From the perspective of the industry, if the subsequent Russian-Uzbekistan conflict further escalates, it is likely to cause the supply of relevant rare gases to be tight.

Chibang Consulting believes that the increasingly complex situation in Russia and Ukraine may impact the inert gas supply in the region. Although the production line will not be interrupted in the short term, the reduction of gas supply will still cause price rise, and the production cost of semiconductors may rise. Inert gas is mainly used in semiconductor micro-imaging process. The link that needs neon gas is DUV exposure, and neon gas is the necessary gas in its required mixture gas, which is difficult to replace. Ukraine supplies most of the world's neon gas, so its regional economic situation is unstable or will have an impact on the stability of the industrial chain, which will form a phased impetus to the rise of wafer manufacturing costs.

In addition, Russian palladium is also an important raw material for semiconductors, mainly used in packaging, and used in the manufacturing of sensors and memories. Russia accounts for about 40% of global palladium supply.

Techcet said that semiconductor manufacturers are highly dependent on C4F6 (hexafluorobutadiene), neon, palladium and other special raw materials from Russia and Ukraine. More than 90% of the supply of U.S. semiconductor-grade neon comes from Ukraine, and 35% of palladium comes from Russia.

How much does the Chinese market affect?

Once the situation in Ukraine and Russia worsens, the supply of neon, krypton, palladium and other materials may be increased. According to the data of the United States Trade Commission (ITC), the price of neon rose by 600% at one time during the tense period in the Crimea Peninsula in 2014.

Before that, the price of neon gas has experienced a sharp rise. According to the price tracking data of Baichuan Yingfu, the price of neon gas (99.99% content) in China has risen from 400 yuan/m3 in October 2021 to more than 1600 yuan/m3 at present.

From the perspective of global manufacturer distribution, the main producers of Electronic Special Gas at present include Air Liquide of France, Air Chemical Products of America, Linde Praxair, Showa Electric of Japan, Dacheng Industrial Gas of South Korea, SK of South Korea, Sumitomo of Japan, Lianhua Industry of Taiwan, China, China, etc.

Although the electronic specialty gas has many barriers and relatively high industry concentration, China has also made technological breakthroughs in many varieties, such as nitrogen trifluoride, ultra-pure ammonia, germane and other supporting semiconductor materials, which are the sub-industries with the fastest progress in domestic substitution. Some electronic specialty gas has gradually realized localization.

Guojin Securities believes that if there is a supply risk of neon, krypton and xenon gas in the future, it will take more than half a year for downstream wafer factories to seek alternative suppliers, and they will face new short supply risks. Domestic Kaimeite gas and Huate gas can supply photolithographic gas. Kemet gas supplies relevant rare gases, such as neon, krypton, xenon and mixed gases; Huate gas supplies krypton-neon mixture, fluorine-ne mixture and other gases for lithography. If the supply of Ukrainian neon gas and krypton gas is blocked, domestic Kemet gas and Huate gas are expected to benefit.

It is reported that at present, the krypton-neon mixture, fluorine-ne mixture and other dilute photoresist gases used for semiconductor lithography by Huate gas have been certified by ASML, the world's largest lithography mechanism manufacturer. The recent friction in the international and regional situation may aggravate the shortage of rare gas supply, and the company's performance elasticity can be expected under the situation of supply exceeding demand.

Due to the shortage of electronic components caused by the surge in demand and limited output growth, the semiconductor industry is more vulnerable to the impact of the external environment.

At the beginning of 2021, affected by the earthquake in Japan, the production line of the largest KrF photoresist manufacturer in the world was contaminated, and the relevant KrF photoresist production line has not yet resumed production, which has a huge impact on the global KrF photoresist supply. While this regional conflict has pushed up the cost of the industrial chain, it has also increased the instability of the semiconductor industrial chain