Russia is limiting its exports of three noble gases used in the production of semiconductor chips.
The move will likely exacerbate an already occurring shortage of chips used to build electronics and automobiles. Ukraine was one of the world’s largest suppliers of noble gases until it suspended production at its plants in Mariupol and Odesa in March.
While Russia used to provide Japan and other nations with noble gases, the Russian government announced that special state permission would be required until December 31 for any exports of the vital substances. The limit will remain in place until at least the end of 2022.
The decision was made to allow an opportunity to “rearrange those chains that have now been broken and build new ones,” Deputy Trade Minister Vasily Shpak told Reuters via the ministry’s press service on Thursday.
“We plan to increase our production capacity (of noble gases) in the near future. We believe that we will have an opportunity to be heard in this global chain, and this will give us some competitive advantage if it is necessary to build mutually beneficial negotiations with our colleagues,” Shpak said.
The noble gases that will be affected are neon, krypton, and xenon, which are used to manufacture chips. Russia produces about 30% of the worldwide supply of the three gases.
These restrictions by Russia might be partly in response to Taiwan curbing its exports to Russia after the invasion of Ukraine. Taiwan is the global leader in chip production.
All new cars are built with multiple microchips onboard to control everything from window motors to navigation systems. The auto manufacturing industry has been hit hard by chip shortages, causing many significant auto producers’ production slowdowns.
Due to the shortage, auto manufacturers produced 1.7 million fewer vehicles in 2021 than in 2019, the last full year before the pandemic.