Monday, Aug 15, 2022
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Russia-Ukraine conflict to worsen chip shortage: Report

The chip shortage will impact automakers, electronic device manufacturers, phone makers, and many other sectors that are increasingly reliant on chips

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The global chip shortage has already hit several industries after the Covid-19 pandemic wrecked the supply chain but the worse is far from over as the Russian-Ukraine is likely to further impact the ongoing crisis.

The chip shortage will impact automakers, electronic device manufacturers, phone makers, and many other sectors that are increasingly reliant on chips, the report warns.

Russia and Ukraine are the major suppliers of key raw materials that go into making chips. Russia controls as much as 44 per cent of global palladium supplies, Ukraine produces 70 per cent of the global supply of neon.

The markets can expect the global chip shortage, which began with the pandemic, to worsen if the military conflict lingers on, says a Moody's Analytics report.

The Russian invasion of Ukraine will also lead to higher oil and natural gas prices worldwide, the report adds.

According to the agency, Russia controls 12 per cent of the global crude oil production, 17 per cent of natural gas, 5.2 per cent of coal, 4.3 per cent of copper, 6.1 per cent each of aluminium and nickel, 15 per cent of zinc, 9.5 per cent of gold, 5.4 per cent of silver, 14 per cent of platinum, 44 per cent of palladium and 11 per cent of wheat.

On the other hand, Ukraine meets as much as 70 per cent of the global neon demand.

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