Russia's full-scale attack on Ukraine naturally causes major local problems, but it is not going to worsen the ongoing chip shortage or disrupt the global semiconductor supply chain, according to major chipmakers as well as the Semiconductor Industry Association (SIA). Also, the newly imposed sanctions against Russia are not going to have a significant impact on the industry.
"We do not anticipate any impact on our supply chain," a spokesperson for Intel told Bloomberg. "Our strategy of having a diverse, global supply chain minimizes our risk of potential local interruptions."
Ukraine is a supplier of neon gas to companies like ASML and Micron and while companies from the country are not the only suppliers of neon to chipmakers, a supply disruption is still a supply disruption that can cause certain problems. But producers of semiconductors usually stockpile materials they need and have a diverse supply chain, so even if one supplier cannot deliver something on time, this does not disrupt their manufacturing operations.
"At GlobalFoundries, we do not anticipate a direct risk," said GlobalFoundries, which has fabs near New York, Singapore, and Dresden, Germany and which produces chips for dozens of clients, including AMD and Intel. "We are not totally immune to global shortages, but our footprint provides us with more insulation."
Earlier ASML and Micron said that potential disruptions of neon supply from Ukraine would not cause major problems as they could source the noble gas from other partners.
"The semiconductor industry has a diverse set of suppliers of key materials and gases, so we do not believe there are immediate supply disruption risks related to Russia and Ukraine," said John Neuffer, chief executive and president of the Semiconductor Industry Association.
On Thursday, both the U.S. and the U.K. said they would suspend and prohibit all dual-use export licences to Russia, which essentially prohibits selling of a variety of high-tech products — from simple chips to jet engines — to Russia. While all the details of the ban yet have to be revealed and detailed, the SIA believes that since Russia is a small consumer of chips, the new export control rules will not have a significant impact on the semiconductor industry.
"The U.S. semiconductor industry is fully committed to complying with the new export control rules announced today in response to the deeply disturbing events unfolding in Ukraine," said the head of SIA. "We are still reviewing the new rules to determine their impact on our industry. While the impact of the new rules to Russia could be significant, Russia is not a significant direct consumer of semiconductors, accounting for less than 0.1% of global chip purchases, according to the World Semiconductor Trade Statistics (WSTS) organization."
But while Russia does not build many high-tech products (cars, consumer electronics, PCs, etc.) locally and therefore does not need many chips per se, it still buys a lot of dual-use products for its information and communications technology (ICT) industry, including servers for banks and machines containing high-performance computing (HPC) accelerators for cloud and infrastructure companies (and we are not even talking about hardware used to spy on its own residents). Based on data from IDC, the broader Russian ICT market totaled about $50.3 billion out of the $4.47 trillion global market, or 1.12%. Although 1.12% is not a big share, $50.3 billion is a lot of money.
