Following the invasion of Ukraine, rare-gas supply chains have been reinforced and suppliers diversified, meaning the industry is now much less vulnerable to geopolitical risk
Hence the concern, after Russia’s invasion, about disturbance to chipmakers, which use neon in the lasers that etch circuit patterns onto silicon wafers, and in turn supply other industries. The Joint Research Centre, the European Commission’s scientific-advisory body, warned of “severe” disruption, and noted a shortage of neon could “substantially impact industrial supply chains reliant on semiconductors”.
This flow stopped after Russia’s invasion last year. The conflict also affected the operation of steel mills in Ukraine. As a result, rare-gas purifiers in Ukraine have been running at a fraction of full capacity. At the same time, sanctions have limited exports from Russia. The drop in supply caused a surge in wholesale prices, particularly of xenon, which went from $15 a litre in 2020 to more than $100 in mid-2022.
Retrofitting air-separation plants with taps that allow rare-gas mixtures to be extracted is costly and halts production for two or three months. But new plants are being built with the taps installed, which will increase future supply. Meanwhile, Russia diverted exports to China, which then had a surplus, and began exporting its own production.
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