Due to the fact that the world operates economically globally, the paradox of chaos theory eventually arises, which says that the flapping of a butterfly’s wings in one part of the world can cause a hurricane in the other end of the planet. It is obvious that the war in Ukraine is something much more serious than that, but what will this mean on the market for the components that make up the hardware of our computers?
How does the war in Ukraine affect the hardware world?
Each conflict means that said country has to put all its human and economic efforts into the war and therefore the dynamics of exports and imports change completely compared to times of peace. The first step that NATO and its allies took from the orbit of NATO and its allies was not to enter the conflict militarily, but to cut trade relations with Russia in the sale of certain key products, including semiconductors, which are essential for a large part of the Russian weapons system. Which isn’t to say they can’t find other sources of supply, China being the most obvious of them all.
The reason why Russia launched a blitzkrieg against its neighboring country is not because of diplomatic problems but because of resources, and Ukraine is rich in metals such as palladium and nickel with significant industrial uses and noble gases. That is to say: helium, neon, argon, krypton and xenon. Which are used in the manufacture of semiconductors, dental fillings and electric vehicles. This without forgetting the question of the reserves of natural gas and crude oil available to the Slavic country.
Intel and ASML are the most affected
If we take into account that the Slavic country is the largest producer of neon gas used in lasers that cut wafers and on which 90% of American production depends, it is clear that their industry is going to be affected by the conflict, in particular Intel, which is the buyer of 50% of said gas. This without forgetting the palladiumwhich is used in 35% of semiconductors and whose biggest exporters are the Russians. Another of the companies affected is the Dutch company ASML
The trend towards which the industry is heading is the so-called regionalization. Which is based on the relocation of production to foreign countries to bring it back to the countries of origin or, alternatively, the search for other sources of supply of raw materials. However, one of the most obvious consequences is that in looking for alternatives, manufacturers are going to have supply problems, as it is a slow process to say the least and can even interrupt roadmaps or delay them. .
China, on the other hand, having good relations with Russia and being denied access to ASML’s EUV technology, key for future semiconductors, had to start developing its own solutions. If Russia takes control of Ukrainian land assets, it will lead to increased costs for its rivals and an advantage for the nation led by Xi Jinping.
