Micron Technology Inc, the biggest maker of computer memory chips in the US, said that the growing crisis in Ukraine highlighted the complexity and vulnerability of the semiconductor supply chain.
Some of the gases used in the production of chips come from the country, which the US says Russia is invading.
“For Micron, we have a small part of our noble gases coming from Ukraine and, of course, we carry large inventory, but more importantly have multiple sources of supply,” Micron chief executive officer Sanjay Mehrotra said, referring to a group of nonreactive gases such as neon. “While we continue to monitor the situation carefully and certainly hope the situation will de-escalate, we believe, based on current analysis, that our supply chain of noble gases is in reasonable shape.”
Shortages of electronic components, caused by a surge in demand and limited increases in production, have made the semiconductor industry particularly vulnerable to shifts in geopolitics. The COVID-19 pandemic and a series of human-made and natural hazards have also highlighted the fragility of a supply chain that spans the globe.
Manufacturing a semiconductor, which 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 is dependent 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 depend on them.
Mehrotra said that the shortages, which have reduced shipments of everything from home appliances to smartphones and vehicles, are improving in some respects, but have not made hoped-for progress in others.
Shipments of smartphones and computers, the two biggest product categories that use Micron’s memory chips, have been held back by shortages of basic analogue chips. That in turn has led PC makers to pare orders to companies such as Micron.
“We are coming into the year certainly expecting the supply chain shortages to improve for the non-memory components we procure from other suppliers,” Mehrotra said, adding that the rate of improvement for the shortages “is behind what we were hoping for.”
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