Thread by @smartkarma

Neon is the world's Kryptonite it would seem.

The noble gas is widely used in chip lithography, a critical part of the semicon supply chain.

Ukraine supplies about 70% of the world's neon gas, 40% of krypton and 30% xenon (ICSmart)

Unsurprisingly, prices have gone spaz👇🏽

According to Baiinfo, the price of neon gas (with a content of 99.99%) in China has risen rapidly from RMB 300 yuan/cubic meter in early October 2021 to the current 1700-1800 yuan/cubic meter.

Global semiconductor companies have 6 months inventory of the noble gas.

According to Techcet, over 90% of U.S. semiconductor-grade neon supplies come from Ukraine.

It takes 3 to 6 months to find replacement due to the complex process of chip lithography.

Evelyn Zhang believes China can be self-sufficient in Neon gas, Japan/ Korea need large import.

According to Gas Ecosphere, in 2021, China imported 4,783 cubic meters of neon gas, 127.87% increase YoY.

South Korea imported 1,128,673 cubic meters of neon gas, 634.11% increase YoY in 2021. South Korea used to import all neon gas and relied on foreign technology, and just realized nationalized production in early 2022.

The plant built by Posco (005490 KS) in Korea can produce about 22,000 cubic meters of high-purity neon gas per year, which is expected to meet only 16% of South Korea's demand.

Japan can only produce a very small amount of noble gas domestically, and import most from Ukraine and China. Ouch.

Bottomline: this escalation is so much more than just oil and gas!

How Semiconductor Supply Chain in China Stands to Benefit from Ukraine Crisis. Read more: skr.ma/2AcGT

Potential Semiconductor Supply Chain Crisis if Russia Invades Ukraine?. Read more: skr.ma/MdLYn