Electrical Equipment / Components & Telecoms

Having a strong scientific and technological strength does not necessarily mean you can sit back and relax, because there is an important bargaining chip of resources, especially some scarce resources.

Russia announced that some countries and regions will restrict the export of resources such as neon gas, and respond to the malicious attack by the European Union. It is expected that the Congress of the United States, Japan and South Korea will be greatly affected and turn to China one after another. Are businesses likely to raise prices?

Turning to China, Russia says Chinese companies may raise prices

For China, Russia's decision has little impact.

First, we are not in a tense relationship with Russia, and Russia does not have China on its blacklist.

Second, China has enough resources such as noble gases and can be self-sufficient without relying on foreign countries.

At this time, the three countries of the United States, Japan and South Korea are in a very passive and awkward position. Although the United States has developed well in all aspects, it lacks the resource of neon gas.

Due to the weak base of heavy industry, Japan and South Korea cannot produce such gases by themselves. In addition, the country is relatively small and resources are extremely scarce, so they rely heavily on imports.

Due to Russia's restrictions, these three countries have now focused on China, and China is in a favorable position in the market.

Moreover, relevant Chinese companies will increase the corresponding supply according to the market situation, and at the same time, they will also adjust the price. According to reports, the Chinese side will sell at a price that is 20% to 25% higher than that of the Russian side, which is also reasonable. within the range.

Russia-Ukraine conflict, "core shortage" is hot

Today, the global "core shortage tide" has become more and more intense, and even this trend is still expanding. Relevant people even believe that this phenomenon will not be resolved until at least the beginning of 2024.

As an important raw material for semiconductors, nitrogen consumption is as high as 30%, so the competition for this raw material from various countries is also hot.

Russia owns nearly 70% of the nitrogen in the world, which is considerable, but the country does not engage in the purification and production of high-purity nitrogen.

Instead, it was entrusted to neighboring Ukraine. However, the Russia-Ukraine incident is obvious to all. Therefore, Russia is bound to withdraw its nitrogen investment in Ukraine.

In this way, semiconductor manufacturing will lose the most important raw materials, and it is normal for chips to be lacking and prices to skyrocket.

According to reports from relevant agencies, since 2021, the global chip price has increased by 5 times or even 10 times, and the supply is in short supply.

Even the famous "STMicroelectronics Group", the production capacity in 2022 has already been snapped up by customers from all over the world, and there is a backlog of orders for 16 months, which is very shocking.

At the end of May last year, U.S. Commerce Secretary Raimondo warned that the global chip shortage is an indisputable fact.

If the raw materials are not in place, the chips can only rise.

Russia's policy has a global impact

In today's globalized society, the policies of any country will trigger a butterfly effect, which will spread to the whole world, and no country can be immune to it.

For example, the introduction of Russia's new policy this time will bring negative effects to many countries. Even the powerful United States cannot be spared. In fact, the more powerful a country is, the greater the impact will be.

As soon as Russia released the news, U.S. stocks started a dramatic synchronization and began to fall. Among them, Micron Technology fell by 7.2%, and Nvidia fell by nearly 4.4%.

Another example is South Korea. According to the data released by the Korean semiconductor industry, South Korea mainly relies on China, Ukraine and Russia for its noble gases, of which China’s import volume is even as high as 70%. In the future, this proportion will only increase and not decrease.

Coupled with the fact that the epidemic is raging around the world now, it has increased the panic of many countries. After all, there are no eggs under the nest.

In addition to restricting nitrogen exports, Russia has more ruthless operations to face sanctions from some countries, and the means are also vigorous.

For example, Russia plans to spend a lot of time on lithography machines, which are an important component in chip production, and the total cost is even as high as 35%.

However, Russia has a big disadvantage in this aspect. The real master of this field is the Dutch ASML company, which can even be said to be a monopoly.

Therefore, Russia has started intensive arrangements in this field, hoping to surpass the Netherlands one day.

Resource is the most important, it is the key

Now the United States has ushered in a bottleneck period of development. Before that, it has been reckless against other countries by virtue of its strong comprehensive strength, but Russia is not easy to provoke. It introduced this policy when it was unbearable. It is a disgrace to the United States.