An unexpected casualty Russia's war in Ukraine - neon

There has been a been a lot of fallout from Russia's invasion of Ukraine - commercial economic, political, although thankfully not nuclear, so far at least. One unexpected one is a potential scarcity of neon gas.

Before you say, well, we can suck it up and do without a few more neon signs, you should know that that the colourless odourless gas is an essential element of semiconductor chip production, and those we can't do without (think cars, computers, phones, airplanes, and pretty much all electronics of any kind). Neon is what is called a "buffer gas", used to control the exact wavelength of laser light when carving silicon wafers into the tiny complex chips used in electronics.

Neon is all around us, in the air we breathe, but in tiny quantities (about 18 parts per million, or less than a fifth of one percent). It must be captured directly from the air using specialized air separation technology, and then purified by an equally specialized chemical process. It turns out that about half of the 667 million litres of semiconductor-grade neon produced each year comes from just two companies in Ukraine. 

Prior to Russia's 2014 annexation of Crimea, Ukraine produced almost 70% of the world's neon. The price of neon suddenly shot up about 600% overnight after that event, and this provided a much-needed (if somewhat belated) wake-up call. Since then, other countries have been setting up production facilities, particularly China (which brings its own set of problems), but also the EU and USA. However, the world is still embarrassingly reliant on two companies, one in Mariupol (currently under intense bombardment and siege by Russia), and one in Odesa (which will be Russia's next target, if Mariupol falls).

There is already an ongoing semiconductor chip shortage, due to a confluence of various different factors, exacerbated by the COVID-19 pandemic. Chip-makers say that have anywhere from one to six months of neon supplies stockpiled. But you can expect substantial price rises in anything that incorporates electronics, which is, well, pretty much everything. And don't even think about Russia's dominance in production of palladium and C4F6 gas (both also used in semiconductors) and of nickel (an essential component in battery technology). Globalization has its advantages, but it also has its drawbacks.