Recently, according to the South Korean electronics industry media The Elec, the price of neon gas used in chip production has begun to decline.
According to the report, due to the outbreak of the Russia-Ukraine conflict, the price of neon gas used in wafer manufacturing or semiconductor production rose 20 times in 2022, but the price has dropped from a peak of 30 million won/47 liters to 5 million won/47 liters.
Russia and Ukraine are major suppliers of semiconductor raw materials such as neon, argon, krypton, and xenon, with nearly 70% of the global production of neon supplied by Ukraine, while Russia's supply of inert gases accounts for 30% of the total global supply.
With the outbreak of the Russia-Ukraine conflict, the global production of neon, xenon and other gases has decreased significantly, and the shortage of supply in the global chip market has intensified. To reduce dependence on imported products, South Korean memory giants Samsung and SK Hynix have previously stated that they will significantly increase the amount of gas produced domestically in South Korea.
Among them, Samsung Electronics and POSCO Steel signed a "Memorandum of Understanding" on October 27, 2022 for cooperation in semiconductor xenon gas business. Samsung Electronics plans to accept POSCO Steel's xenon gas supply starting from 2024.
SK Hynix has partnered with POSCO Steel and South Korean special gas producer TEMC in 2022 to successfully develop neon production technology. SK Hynix's goal is to increase the localization proportion of neon to 100% by 2024. Meanwhile, SK Hynix also plans to domesticate the krypton and xenon gases used in the etching process by June next year.
The Elec report points out that prices may further decrease due to South Korean chip manufacturers increasing their use of gas from Chinese and local suppliers. The operating rates of Samsung and SK Hynix wafer factories have also decreased due to reduced chip demand, which means that the demand for neon gas has also decreased. Industry insiders said that chip manufacturers expected prices to return to the level before the outbreak of the Russia-Ukraine conflict last year.
