Due to the fact that the world works economically in a global way, the paradox of chaos theory ends up being produced, which says that the flapping of the wings of a butterfly in one part of the world can cause a hurricane in the other end of the planet. It is obvious that the war in Ukraine is something much more serious than that, but what will it mean in the market for the components that make up the hardware of our computers?
How does the Ukraine War affect the world of hardware?
Every conflict means that said country has to put all its human and economic effort into the war and, therefore, the dynamics of exports and imports change completely compared to when there are times of peace. The first measure that NATO and its allies have taken from the orbit of NATO and its allies has not been to enter the conflict militarily, but to cut off commercial relations with Russia in the sale of certain key products, including semiconductors, which are key to a large part of the Russian weapons system. Which is not to say that they can’t get other sources of supply, China being the most obvious of all.
The reason why Russia has launched a blitzkrieg against its neighboring country is not because of diplomatic problems but because of resources, and that Ukraine is rich in metals such as palladium and nickel with important industrial and noble gas uses. That is: helium, neon, argon, krypton and xenon. Which are used in the manufacture of semiconductors, dental fillings and electric vehicles. This without forgetting the issue of Natural Gas and crude oil reserves that the Slavic country has.
Intel and ASML are the most affected
If we take into account that the Slavic country is the largest producer of neon gas used in lasers that cut wafers and that 90% of US production depends on said then it is clear that their industry is going to be affected by the conflict, especially Intel, which is the buyer of 50% of said gas. This without forgetting the palladiumwhich is used in 35% of semiconductors and whose largest exporters are the russians. Another of the affected companies is the Dutch ASML that provides machinery for EUV processeswhich he buys 20% of noble gases to the countries related to the armed conflict that is being experienced at the moment.
The trend to which the industry is going is the so-called regionalization. Which is based on relocating production in foreign countries to bring it back to the countries of origin or, alternatively, looking for other sources of supply of raw materials. However, one of the clearest consequences is that while looking for alternatives, manufacturers are going to have supply problems, since it is a process that is slow to say the least and that it can even interrupt the roadmaps or delay them.
China, on the other hand, having good relations with Russia and being denied access to ASML’s EUV technology, key for future semiconductors, has had to start developing its own solutions. If Russia gains control of Ukrainian land assets it will result in increased costs for its rivals and a benefit to the nation led by Xi Jinping.
