Affected by the situation in Russia and Ukraine, Volkswagen, BMW, Mitsubishi, Renault and other world-renowned automobile manufacturers have successively announced the suspension of production in some factories.
Volkswagen's Porsche plant in Leipzig has ceased production
Many netizens wondered: these factories are not in Russia, how can they be affected? The root lies in the semiconductor chips used in the automotive industry, and there are two key materials in the hands of Russia in the manufacturing process. Under globalization, no one can be left alone. What material is so critical? Come with me to see it.
Odessa, a coastal city in Ukraine that surrounds the Black Sea, is also one of the busiest ports in the country. There is also a little-known Crypto in the city, but it has a pivotal role in global semiconductor production. The company makes a rare gas, neon gas, and the laser is powered to etch the pattern into a computer chip. The company's semiconductor grade neon products were sold to related companies in Japan, South Korea, Chinese mainland and Taiwan in Europe and Asia, most of which were sold to the United States, and it is understood that 90% of the semiconductor grade neon used by chip companies in the United States comes from Ukraine. In the current tense situation, the company's facilities have not been damaged, but they still stop production.
But that's not the ultimate source, because the neon gas produced by Ukrainian companies comes from a byproduct of Russian steel manufacturing. Some Russian steel companies will roughly purify them, then bottle them and sell them to Ukrainian companies, and then further purify them in Ukraine to reach the semiconductor grade. Is Russia capable of producing most of these neon gases globally? yes! Because this involves building a dedicated infrastructure within the steel mill to extract it, it can be complicated to produce more neon elsewhere, because the steel plant needs to be overhauled, which takes quite a long time.
As most netizens learned from high school chemistry class, neon is one of the so-called inert gases, located in a column on the far right of the periodic table. It is in the air of nature, but in only a small proportion, and can be extracted from the air by fractionation of the liquid phase. Inert gas is extracted from the normal ambient air of the air separator. The air is gradually cooled by a heat exchanger under pressure. In this process, different gases in the air change from gaseous to liquid at different temperatures. They fall underneath the separator in the form of droplets and can then be "harvested", for example, argon changes state at -186 °C, and at -246 °C the neon gas becomes liquid.
Air separation device
In the air separation industry worldwide, liquid nitrogen and oxygen can be produced, as well as slightly more inert gases, which is more economical. Because there is less neon in the air, it is more difficult to extract neon gas from the air than from argon, but considering the economy, it is more important to extract neon gas from the air.
According to data from different market research agencies, Russia and Ukraine alone supply about 50% of the world's semiconductor grade neon, which is a market share that cannot be underestimated, so Ukraine and Russia have become one of a series of bottlenecks in the global semiconductor industry. The current situation is tense, which has caused temporary supply difficulties.
Semiconductor chips play the role of tech brains in our phones, laptops, smart homes and even cars, industries that once had a global shortage in 2021 that limited production to nearly every major automaker, and companies like General Motors shut down entire factories as a result. Even earlier in 2014, when a dispute between Russia and Ukraine over Crimea broke out, the price of neon gas soared by 600%. About 75% of the world's purified neon gas is used in semiconductor chips, and now the shortage of neon gas and the consequent restriction of semiconductor chip production have extended the impact to the automotive industry.
For example, the United States said it was looking for alternative suppliers outside Ukraine on a global scale, a company that makes chip drawing lasers owned by Dutch lithography giant Asmail is thinking of reducing the consumption of neon gas, and Japanese chipmakers have downplayed the impact saying they import less than 5% of the neon gas from Ukraine.
There is also a rare precious metal that can be used to make sensor chips, memory and other applications, and about 35% to 37% of the world's production comes from Russian mines, which is the metal palladium. It is understood that 35% of palladium in the United States comes from Russia.
A Norilsk nickel plant in Norilsk, Russia, also produces palladium
Palladium is a silvery-white metal with less hardness, softer texture, inactive chemistry, and is particularly stable in air and humid environments at room temperature. Lumpy palladium loses its luster when thrown into a fire, but returns to its original luster quickly after leaving the fire.
Hot palladium ingots from a foundry in Kasimov, Russia
However, the reserves of palladium on the earth are scarce, the content in the earth's crust is about one hundred millionth, mining and smelting is more difficult, and it is mainly symbiotic in the free state in nature in platinum palladium and raw platinum ore.
Under the tension between Russia and Ukraine, the manufacture of neon gas and metal palladium has been greatly affected, which has spread to the semiconductor chip and automobile manufacturing industries. In the global village, it will become more and more difficult for any country to stand alone. Therefore, I sincerely hope that the situation in Russia and Ukraine will be quickly eased and that the world will be peaceful and tranquil.