Ukraine Accounts for 70% of Global Neon Gas Production
The author is an analyst of NH Investment & Securities. He can be reached at hwdoh@nhqv.com. -- Ed.
Semicon supply/demand may be impacted by interruptions in the production of gases such as neon and argon due to the Ukraine-Russia conflict. Ukraine accounts for 70% of global neon gas production.
Neon gas prices increased tenfold during 2015 Ukraine war
The recent dispute between Ukraine and Russia may affect semicon supply/ demand. As a major producer of gases required for semicon manufacturing (eg, neon, argon, and krypton), Ukraine accounts for over 70% of global neon gas production. During the 2014~2015 war in Ukraine, the price of neon gas for semicon production jumped more than tenfold to US$3,500/m3.
We note that the excimer lasers used in ArF-Immersion equipment for semicon exposure processes are made possible through the mixing of specific gases such as neon, fluorine, and argon, with neon accounting for over 95% of such mixtures. During the 2015 conflict in Ukraine, excimer laser gas mixtures for semicon manufacturing traded at upwards of US$25,000 per 50L, having climbed in price by over 20x versus previous levels. Semicon exposure processes account for 70% of global neon demand.
Ukraine-Russia conflict may affect semicon materials supply
In 2015, when neon gas prices soared, the industry conducted research on methods to reduce the usage of neon gas. By adjusting software logic and optimizing the purging process of the gas filling procedure, usage can be cut by 25~50%. Still, neon gas, etc, continues to play an important role in semicon production. Among domestic players, DIG Airgas is a producer of neon gas.
Memory semicon spot prices have continued to rise since the beginning of the year for NAND and from February for DRAM. And, the recent Kioxia fab accident has further impacted NAND supply. As a result, Micron has decided to raise NAND spot prices. Against this backdrop, materials production disruptions due to international disputes have the potential to additionally impact memory semicon supply/demand.