US SIA: Statement on the Semiconductor Embargo against Russia-EEWORLD

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The U.S. Commerce Department on Thursday announced new export controls on Russia because of its war in Ukraine, saying semiconductors, computers, telecommunications, information security equipment, lasers and sensors will be subject to the new ban. In addition, 49 Russian military end users were added to the control list.

The department said the European Union, Japan, Australia, Britain, Canada and New Zealand would take similar measures, and more countries were expected to join. Biden warned that these were the first "first round of sanctions" and that the government would strengthen its response based on Russia's next actions.

In response to this matter, SIA issued a statement:

" The U.S. semiconductor industry is fully committed to complying with the new export control rules announced today in response to the deeply troubling events in Ukraine. We are still reviewing the new rules to determine their impact on our industry. The impact of the new rules on Russia could be significant, but Russia is not a significant direct consumer of semiconductors, accounting for less than 0.1% of global chip purchases, according to the World Semiconductor Trade Statistics (WSTS) organization. The broader Russian ICT market totals only about $50.3 billion out of a $4.47 trillion global market, according to 2021 IDC data.

Additionally, the semiconductor industry has a diverse set of suppliers of key materials and gases, so we do not see any immediate risk of supply disruptions related to Russia and Ukraine. ”

Deloitte: The Russian-Ukrainian war will not affect the semiconductor industry in the short term

PN Sudarshan, partner at Deloitte India, while talking to BT, believes that the semiconductor industry will not see any major impact, at least in the short term, due to the ongoing crisis.

PN Sudarshan, partner and TMT industry leader at Deloitte India, told Business Today that the semiconductor industry may not see any major impact due to the ongoing military action between Russia and Ukraine.

Both Russia and Ukraine are suppliers of components used in semiconductor manufacturing.

"The semiconductor supply chain (excluding some specific categories like Opto) is primarily based in Asia and the US, so there may not be a major impact in the short term, apart from the negative sentiment that any war would naturally trigger. But such a conflict could affect oil prices, which could trigger a ripple effect and affect supply and demand. Of course, a prolonged conflict and an extended war could have more serious consequences," Sudarshan said.

Russia is a major producer of palladium. Palladium is essential for memory and sensor chips. It also produces several other key raw materials for computer chips, including the rare earth metal scandium. Ukraine, on the other hand, is a major exporter of neon. It is a highly purified gas used in the most important process - etching circuit designs onto silicon wafers to make chips. However, semiconductor supply is mainly in Asia and the United States, Sudarshan said.

“It is too early to say. It is based on the assumption that it will not escalate to other regions. We do not have a big semiconductor (conductor) reliability on Ukraine or Russia,” said Tarun Pathak, research director at Counterpoint Technology.

"Russia and Ukraine are very important in the supply chain of semiconductor manufacturing components. They produce important gases and rare earth metals, which are used in photolithography," Navkendar Singh, research director at IDC India, told Business Today.

Contrary to Sudarshan’s view, some industry experts expect Russia’s war with Ukraine to put pressure on the semiconductor industry, leading to manufacturing restrictions that cause supply shortages and higher semiconductor prices.

Semiconductors power all electronics on Earth and in space, with a complex chip manufacturing ecosystem. Chip manufacturing is a difficult and complex process. The global semiconductor industry is interdependent, and no country in the world can currently master this ecosystem.

According to data from research firm Statista, the global semiconductor industry was worth approximately $440 billion in 2020 and is expected to grow to approximately $550 billion by 2021, with the potential to exceed $600 billion next year.

Counterpoint: The Russia-Ukraine war will weaken the global semiconductor industry

The semiconductor shortage, which was expected to ease by mid-2022, could get worse, the report said. Since both Russia and Ukraine are suppliers of components used in semiconductor manufacturing, Russia's attack on Ukraine would further pressure the global industry - there are concerns that it could lead to manufacturing restrictions, causing supply shortages and higher semiconductor prices.

"Like Taiwan, Ukraine and Russia also play a pivotal role in the global semiconductor supply chain. Ukraine is a very important source and supplier of raw materials such as semiconductor-grade neon, which is used in semiconductor manufacturing. Similarly, Russia is a major source of palladium, which is used in many memory and sensor chips. In fact, it accounts for 45% of the global supply. Hence, the trickle-down effect of a war could affect chip production capacity, leading to a spike in chip prices," Prabhu Ram, head of industry intelligence group at CyberMedia Research, told Business Today.

Ukraine, on the other hand, is a major exporter of neon, a highly purified gas used in the most important process - etching circuit designs into silicon wafers to make chips.

Keywords：semiconductor Reference address：US SIA: Statement on the Semiconductor Embargo against Russia

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