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Deficit of neon supply due to the war in Ukraine will affect chip production in seven to nine months

The American chip manufacturer Micron Technology does not expect a shortage of components that have ceased to be supplied from Ukraine in the short term.

Two of Ukraine’s leading neon suppliers, Cryoin Engineering and Ingas, which account for 45 to 54% of the world’s inert gas supply for chip production, have been suspended. This will affect prices and may increase the ongoing semiconductor shortage.

The impact of the lack of supplies from Ukraine will be felt in seven to nine months, when the world’s reserves of raw materials will run out, said Qinghai Chan, director of semiconductors at Summit Insights Group LLC.

High demand for neon helped Micron forecast higher-than-expected earnings in the current quarter and show higher-than-expected results in the second quarter, with shares rising more than 4%.

At present, we do not expect any negative consequences for our short-term production volumes due to the Russian-Ukrainian war, but we expect an increase in our costs as we ensure the supply of certain raw materials.” — General Director of Sanjay Mehrotra

He added that recent efforts to diversify the supply and maintenance of raw materials and inert gases have helped contain the blow.

Micron also raised the price of NAND and DRAM memory chips, increasing its gross profit to 47.2% from 26.4% last year.

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