[Asia Economy Reporter Jeong Hyunjin] Russia has decided to restrict exports of inert gases, including neon gas, a key material for semiconductor manufacturing. The domestic semiconductor industry is expected to be relatively less affected by the export restrictions since it has been importing large quantities of neon gas from China following the outbreak of the Ukraine war. However, the recent sharp price surge has caused significant difficulties.
According to Russian news agency TASS on the 2nd (local time), Vasily Shupak, Deputy Minister of Industry of Russia, stated in an interview with TASS that since the end of last month, measures to restrict exports of inert gases have been implemented, including neon gas, argon, and helium used in semiconductor manufacturing.
Neon gas is used in the photolithography process that prints semiconductor circuits with light, producing gases such as argon fluoride (ArF) and krypton fluoride (KrF). The Russian government explained that exports of inert gases will only be permitted with special government authorization until December 31 of this year. The Russian government estimates that 30% of the global supply of neon gas comes from Russia.
Deputy Minister Shupak said, "We have sufficient production capacity and are currently making our presence felt in the market. We plan to expand production capacity in the near future," adding, "We expect to have opportunities to hear opinions within the global supply chain, and if mutually beneficial dialogue with our colleagues is necessary, we believe we will gain a competitive advantage."
He also said, "About 4,000 materials and chemicals are used in the semiconductor manufacturing process, but there are basic ones like neon gas that must be used in the production process," and added, "This export restriction decision may cause temporary disruption in the supply chain."
Since Russian-origin neon gas accounts for only about 5% of the neon gas imported into Korea, the impact of the export restrictions is expected to be limited. However, as Ukraine, a key producer of neon gas, faces supply instability due to the war, neon gas prices have surged sharply in the market, creating a situation where the domestic semiconductor industry needs countermeasures.
According to data released by the Korea Customs Service last month, the average price of neon gas imported into Korea in April was $1,300 per kilogram, which is 4.5 times higher than the previous month. Neon gas prices in March had already risen to five times the total import price of the previous year, and prices increased further within a month. In particular, the replacement of neon gas previously imported from Ukraine with Chinese-origin neon gas caused a significant price increase.
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