Russia's 'Semiconductor Gas' Weaponization: "South Korea Hit First... China Will Benefit"

Researchers are conducting semiconductor material and component development research in the 12-inch semiconductor testbed cleanroom at Daejeon Nano Comprehensive Technology Institute.

[Asia Economy Reporter Hwang Sumi] Foreign media reports have raised concerns about a semiconductor shortage due to the Ukraine crisis. This is a result of Russia restricting exports of key elements used in semiconductor manufacturing.

According to CNN on the 17th (local time), Russia has implemented export restrictions on rare inert gases to unfriendly countries since the end of last month. To export these gases used in semiconductor production, special government approval is now required.

Rare gases refer to six gaseous elements that exist in very small amounts in the air, including neon, argon, and helium. These gases are used to manufacture semiconductors found in many consumer products, from smartphones to washing machines and automobiles. In particular, neon, used in the semiconductor photolithography process, is known to play a very important role in semiconductor manufacturing. This element is one of the raw materials for excimer laser gas and constitutes only 0.00182% of the air.

The industry, which has experienced the worst semiconductor supply shortage due to the COVID-19 pandemic, appears to be tense again due to Russia's recent measures. This is because Russia accounts for about 30% of the global supply of rare gases.

There are also forecasts that South Korea will not be able to escape these effects. Market research group Techset predicted that South Korea, where Samsung is located, will be adversely affected by Russia's export restrictions. This is because South Korea depends on imports for rare gases and, unlike the US or Europe, does not have large gas companies that can increase production.

On the other hand, it is analyzed that China will benefit the most from Russia's recent measures. This is because China has made significant investments in its domestic semiconductor industry since 2015 and has also invested separately in equipment to secure rare gases.

Meanwhile, domestically, it is expected that neon supply will be possible from the second half of this year. TEMC, a specialized material company for special gases used in semiconductor manufacturing, stated at a meeting with the Ministry of Trade, Industry and Energy earlier this year that it is accelerating the localization of rare gases and expects to supply domestically produced neon gas to semiconductor device companies starting in the second half of the year.