Chip Shortage Will Get Worse, Thanks To Russia

Mar 7, 2022 3 min read
Chip Shortage Will Get Worse, Thanks To Russia

If you think we have problems now, you ain’t seen nothing yet…

Sometimes it feels like we’re living in some bad Hollywood movie about a dystopian future where all our leaders are either complete morons or psychopathic maniacs. Just in the auto industry, the past two years have brought the sudden introduction of a deadly virus which spread rapidly around the globe, triggering the shuttering of many automotive plants; demand for new cars also dropping like a rock, then demand picking up sooner than projected only for a shortage of components, namely semiconductor chips leading to rapid price inflation, helping to fuel inflation which looks to be turning into stagflation. Oh, and let’s not forget skyrocketing gas prices, which could be easily alleviated by tapping our own resources instead of financing brutal regimes.

See the aftermath of a C8 Corvette colliding with a truck here.

Back to the chip shortage: if you think it’s been bad (and it has) things are about to get a whole lot worse. A new report from Automotive News details out how the Russian invasion of Ukraine is about to put a huge crimp in the production of those tiny little processors at a time when we were hoping things would begin to rebound.

Apparently, over 70 percent of neon gas in the world is supplied by Ukraine. As you might imagine, a lot of the people who would normally work on harvesting and transporting the stuff are instead taking up arms to defend their country from a foreign invasion. Even if they could continue working their jobs, there’s the risk of the facilities being damaged by Russian attacks, not to mention the fun task of trying to transport the stuff out of the country at the risk of Russian troops targeting those shipments.

Neon gas is critical for operating lasers used in the production of semiconductor chips. In other words, a disruption in the supply could mean a drop in the number of chips made. We’ve already been dealing with manufacturing disruptions and the results have been ugly, like three-year-old cars selling for more than they did when they were new.

It gets even better: the report also states Russia as well as Ukraine are “home to key gases and raw materials needed for the production of semiconductors around the world.” Score another huge victory for our global economy!

Sure, there are other places where neon, etc. can be harvested, but switching to those other sources will take time. As the war in Ukraine rages on, the risk is the neon semiconductor companies have on hand will dwindle.

There is another option, one I don’t think President Biden is going to exercise. If things truly get bad, the federal regulation agencies could roll back their ever-tightening regulations which require modern cars to be sold with a growing number of onboard electronics. We could even, gasp, shift our own gears! I for one would be fine with more analog features in cars. Those who want all the fancy gizmos can pay for them, but give others the option of ditching them, saving money, and alleviating the new car shortage.

Source: Automotive News

Pictures via YouTube

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