SAN FRANCISCO (BLOOMBERG) — Micron Technology, the largest computer memory chip maker in the United States, said the growing crisis in Ukraine highlights the complexity and vulnerability of the semiconductor supply chain. Some of the gases used in the production of chips come from the country the United States claims Russia is invading.
“For Micron, we have a small portion of our noble gases sourced from Ukraine and of course we have a large inventory but more importantly we have multiple sources of supply,” said Managing Director Sanjay Mehrotra. in a Bloomberg Television interview, referring to a group of non-reactive gases such as neon.
“While we continue to monitor the situation carefully and certainly hope that the situation will calm down, we believe, based on the current analysis, that our noble gas supply chain is in a reasonable state.”
Shortages of electronic components, caused by a surge in demand and limited increases in production, have made the semiconductor industry particularly vulnerable to geopolitical shifts.
The coronavirus pandemic and a series of man-made and natural accidents have also highlighted the fragility of a supply chain that spans the globe. Semiconductor fabrication, something that takes three to four months from start to finish, is a complex photolithographic process that requires many steps to build the tiny circuits on sheets of silicon. It depends on the supply of rare chemicals.
And, even when manufacturing is complete, chips are often moved to other parts of the world to be packaged, tested, and installed in the devices that rely on them. Mr Mehrotra said the current shortages, which have reduced deliveries of everything from home appliances to phones to cars, are improving in some ways but have not made the hoped-for progress in others.
Shipments of phones and computers, the two main product categories using Micron’s memory chips, were held back by shortages of basic analog chips. This in turn led PC makers to cut orders from companies such as Micron.
“We enter the year certainly expecting supply chain shortages to improve for non-memory components that we source from other vendors,” Mehrotra said. The pace of improvement in shortages “is below what we hoped”.