Chip shortage crisis amid Russia-Ukraine conflict

Chip shortage crisis amid Russia-Ukraine conflict

Recently, Moody’s has warned that the crisis of chip shortage could worsen due to Russia-Ukraine conflict. Semiconductor chip supplies may be affected due to the Russia-Ukraine conflict. Chip supplies have already been disrupted due to the COVID-19 global pandemic.

  • Russia accounts for 44% of the global Palladium supply. Ukraine, on the other hand, provides 70% of the global supply of neon. Both of these are the major raw materials for making semiconductor chips. Ukraine also supplies rarefied gases used for the production of semiconductor fabricating lasers.
  • The sale of laptops increased due to the lockdown and people staying in their homes during this period. Due to this, the crisis of chip shortage was further aggravated.
  • Semiconductor chips are materials whose electrical conductivity is higher than that of an insulator but less than that of a pure conductor. These can be classified into several categories including memory chips, microprocessors and integrated chips (IC). These act as the flmy brains for most modern electronics devices.
  • They are widely used in industries like vehicle manufacturing, electronics (TVs, smartphones, computers etc.), data centers etc.

Initiatives taken for manufacturing of semiconductors or semiconductors in India:

India Semiconductor Mission:

It aims to initiate long-term strategies to develop a sustainable system of production of semiconductors and displays.

Production Linked Incentive (PLI) Scheme:

Under this, an investment of Rs 76,000 crore will be made for semiconductor and display board production in the next 5-6 years.

Source – The Hindu

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