Neon Gas Shortage Threatens Semiconductor Lithography Amid the Russia‑Ukraine Conflict

Unexpectedly, the already fragile semiconductor supply chain under the pandemic is further strained by the Russia‑Ukraine war.

It is not the sanctions on semiconductor exports that are the main issue, but the risk of a cut‑off of raw materials, especially neon gas, whose supply and price have become precarious.

Neon, an inert gas, is essential for the photolithography stage of chip manufacturing; it is one of the indispensable raw materials for the light source of most mainstream lithography machines.

Ukraine is the world’s largest exporter of neon, accounting for about 70% of the global market.

"Now the price changes every two or three days, and the fluctuation is huge. We sell through distributors, mainly to overseas customers, and foreign quotes are higher than domestic ones," said a representative of domestic lithography‑gas leader Kemet.

Facing the risk of supply interruption, lithography‑machine giant ASML has said it is looking for a "spare tire".

During the Crimea crisis, neon prices once surged by 600% .

One of the Main Materials for Mainstream Lithography Technology

In simple terms, neon is a crucial raw material that generates the "light source" in lithography machines, which require extremely short wavelengths.

Shorter wavelengths enable finer circuit patterns, allowing smaller process nodes.

Using rare gases not only achieves shorter wavelengths but also provides more stable light.

Deep‑ultraviolet (DUV) lithography, which dominates large‑scale production today, consumes large amounts of neon.

DUV machines use a mixture of rare gases and fluorine as the photolithography gas.

Common lithography gases include ArF‑Ne (argon‑fluorine‑neon), Kr‑Ne (krypton‑neon), Ar‑Ne (argon‑neon), and Ar‑Xe‑Ne (argon‑xenon‑neon) mixtures.

During manufacturing, high‑pressure excitation of these rare‑gas mixtures causes electron transitions that emit light of a stable wavelength, which is then filtered and focused to form the light source.

When electrons transition to a lower energy level, they release photons; after amplification in the gain medium, a stable‑wavelength laser is emitted.

Neon, as a buffer gas, is widely present in various laser gases to provide efficient energy.

In the ArF lasers used by most DUV machines, neon accounts for more than 96% of the gas mixture.

With a high‑quality light source, the lithography machine can pattern the wafer: the light removes the photoresist in exposed areas, allowing subsequent chemical etching to form the circuit.

The technology has evolved from mercury‑lamp sources to DUV and now to extreme‑ultraviolet (EUV) lithography, where EUV primarily uses tin plasma to generate light, and companies like ASML are actively developing this next‑generation technology.

ASML Seeks Backup, Samsung & Intel Report No Immediate Impact

In addition to neon, Ukraine also supplies krypton and xenon, which account for about 40% and 30% of global supply respectively.

Another critical semiconductor material, palladium, derives about 40% of its supply from Russia.

U.S. chipmaker Micron noted that the Russia‑Ukraine conflict highlights the complexity and fragility of the semiconductor supply chain.

ASML has stated that it is researching alternative sources of neon.

After the 2014 Crimea incident, neon prices spiked dramatically, prompting many companies to diversify supply to China, the United States, and Canada.

ASML now sources less than 20% of its neon from conflict‑affected regions.

Nevertheless, analysts warn that the long‑term impact of the Russia‑Ukraine situation on chip production could become significant.

"Chip manufacturers have not felt any direct impact yet, but the companies that supply them with semiconductor materials purchase neon and palladium from Russia and Ukraine. These materials are already scarce, so any additional pressure could raise prices and eventually increase chip costs," said a Japanese industry insider.

Domestic gas leaders Huate Gas and Kemet Gas saw their stocks rise despite the market turbulence.

One More Thing

The impact of the Russia‑Ukraine war on technology extends beyond chips.

For example, before any physical conflict, various DDoS attacks were already being launched against Ukrainian networks.

DDoS is a network‑attack method that overwhelms a target’s resources with massive traffic, rendering services unavailable to legitimate users.

Ukrainian government websites and banks such as PrivatBank and Oschadbank have faced DDoS attacks and power outages.

Reuters reported that as early as 2015, Russian hackers were believed to have launched cyber‑attacks on Ukraine, affecting roughly 225,000 people.

Cyber‑security firm ESET discovered a data‑wiping virus installed on hundreds of Ukrainian machines months ago.

The Ukrainian government is now recruiting volunteer hackers to protect critical infrastructure and conduct cyber‑espionage against Russian forces.

Some netizens comment that even if there is a desire to attack Russia, the practical difficulties make such actions unlikely.

Additional observations link various internet products to Ukraine, such as WhatsApp and PayPal founders being of Ukrainian descent, and the team behind Snapchat’s AR masks originating from Odesa.

References:

[1] https://www.reuters.com/breakingviews/ukraine-war-flashes-neon-warning-lights-chips-2022-02-24/ [2] https://en.wikipedia.org/wiki/Extreme_ultraviolet_lithography [3] https://zh.wikipedia.org/wiki/光刻机 [4] https://zh.wikipedia.org/wiki/激光 [5] https://www.reuters.com/world/exclusive-ukraine-calls-hacker-underground-defend-against-russia-2022-02-24/ [6] https://twitter.com/sapitonmix/status/1496797920812843015