February 14, 2022

The White House warned the chip industry to look for alternative sources for its supply chain, as Russia could block access to key materials in retaliation against the U.S. threatened export curb.

According to Techcet, more than 90% of U.S. semiconductor-grade neon supplies come from Ukraine, while 35% of U.S. palladium comes from Russia, putting the U.S. chip industry at a major disadvantage should Russia decide to strike.

According to a senior administration official close to the matter, the administration is prepared for a possible Russian attack.

“Part of that is working with companies to make sure that if Russia takes actions that interfere with supply chains, companies are prepared for disruptions. We understand that other sources of key products are available and stand ready to work with our companies to help them identify and diversify their supplies,” the official said.

Neon is important for the lasers used to make chips. It is a dual product of Russian steel manufacturing purified in Ukraine. Palladium is used in various applications, including sensors and memory.

For more information, read the original story in Reuters.