While the majority of world news and governments focus on the oil and gas dynamics the new sanction package will be made public today. There is another critical supply of an element that is less known but important next to oil and gas in today's world.
This element is neon gas, though it is a byproduct created by the oxidation process of air that is done in a steel plant. Its application of it is most important, as it is used to run the laser machines for making semiconductor chips. By now most readers must have been able to grasp the importance but for the ones unaware do not worry as the next few lines would explain in the most concise way possible.
Everything in today's world has a chip in it, some have chips that are the smallest in size possible but can do various complex tasks. Without these chips most of the functions in these electronic products are dead. For the last eighteen months would has been facing a massive shortage of these chips as the waiting period has increased from ten weeks to twenty-eight weeks.
Now with clarity on the importance, it is important to know the supply and demand dynamics. The majority of the demand comes from Japan, South Korea, and Taiwan as they are major nations for the production of semiconductor chips. And the majority of supply is from Ukraine as the world's largest steel plants are based in the country, especially in the Mariupol and Odessa region.
Though the nations have a Special Purpose Reserve (SPR) of this gas that can be used to meet the demand over the next six months. But using it and then replenishing it would be very difficult as the supply is next to none since the Russia-Ukraine conflict started.
Therefore, in the coming months as the supply of the gas remains low or none there will be another round of shortage panic in the chip industry that would send prices along with the waiting period higher.