Russian-Ukrainian War Impact! TSMC is working with manufacturers to ensure local neon gas supply

According to the Nikkei Asian Review, JK Lin, senior vice president of information technology, materials management and risk management at TSMC, said that TSMC is working with a number of gas suppliers to explore local production of neon gas in Taiwan, China, within three to five years.

Research firm Techcet estimates that neon gas is vital to chip manufacturing, but the Russian-Ukrainian war has severely disrupted supply chains, as Ukrainian producers control up to 50 percent of the neon gas supply for semiconductors. Neon prices have soared as chipmakers scramble to secure supplies, industry executives said.

JK Lin said, “We have a specific plan to work with suppliers to localize part of the neon gas supply and are currently purchasing equipment. The idea is to have more resources to improve the level of security in the supply chain. But not in Do all the supply locally. That's not realistic and it's expensive."

The report pointed out that TSMC is assessing supply chain risks and has developed a continuity plan for about the next five years to ensure that it can procure more than 2,000 materials and chemicals required for chip manufacturing to meet plant construction and capacity expansion plans. JK Lin said that it usually takes four to five years to build a new chip factory, so we need to make such a plan. Amid the multiple disruptions from the pandemic and geopolitical uncertainty, supply chain resilience has become increasingly important over the past two to three years.