The US government has warned domestic chip makers that they could face a material supply crisis, Reuters reports. The warning comes from concerns about a potential conflict between Russia and Ukraine. The industry in Ukraine would almost certainly be affected if Russia launched an attack. US sanctions will be imposed on Russia, which will likely exacerbate the problems with the supply of raw materials.

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The US chip industry is highly dependent on Russian/Ukrainian materials. For example, research group Techcet claims that up to 90% of US supply of semiconductor neon comes from Ukraine and 35% of palladium from Russia. In addition, other important materials such as C4F6, helium and scandium also come from this region.

One company, which asked not to be identified but is a chip maker, said its supply chains are already under review, according to Reuters. A company official notes that “alternative gas sources needed to produce the chips are currently being analyzed” by a number of suppliers.

During the recent military clash between Russia and Ukraine, the prices of these neon lights went up by nearly 600%. The source said that the shortage of neon has not stopped the production of chips yet, but it will inevitably lead to higher prices.

The semiconductor industry has already had a difficult year behind it due to the Covid-19 pandemic. Global supply is scarce, so any news of potential disruptions is extremely worrying for the market. Customers are already dealing with the higher prices, and it looks like the prices could go up even more. Much.