Just as the electronics industry was expecting the semiconductor shortage to ease so Russia’s invasion of Ukraine is likely to result in additional disruption, leading to supply shortages and a jump in semiconductor prices.
Both countries have an important role in the global semiconductor supply chain. Ukraine is a significant supplier of raw materials, while Russia is a key source of palladium which is used in many memory and sensor chips. Both are crucial suppliers of important gases and rare earth metals that are critical to the semiconductor industry.
Any disruption will certainly impact this complex supply-chain and with fears growing that the situation could get worse, many businesses may look to order semiconductor chips in advance, which in turn will exacerbate supply side problems.
This war will certainly add stress to a system that was only just emerging from the pandemic and it’s likely we’ll see further chip shortages, longer long lead times and rising prices.
