As widely reported, there have been severe restrictions placed on the Russian financial system in retaliation by the West to the unprovoked invasion of the Ukraine. Korea, Japan and Singapore have joined in the condemnation and introduced financial sanctions. However, China has refused to recognise the invasion using that word.
Turkey has said that it would block Russian warships from entering the Black Sea through the Bosporus and the Dardanelles Straits which the Economist described as a ‘significant blow to Russia’.
Nikkei reported that chipmakers including TSMC and UMC had been talking to suppliers about the supply of noble gases and precious metals used in chipmaking and for which Russia and Ukraine are said to be important sources. The paper said:
“Ukraine and Russia are important sources of noble gases and precious metals used in chipmaking. These include neon, argon, xenon and krypton from the former, and hexafluorobutadiene (C4F6) and palladium from the latter. Ukraine, for example, controls 70% of the world’s supply of neon, according to research company TrendForce.”
The paper said that previous problems from the Russian invasion of Crimea had led companies to keep bigger than might otherwise have been needed of neon inventories. These bigger inventories will minimise short term disruption.
Reuters reported that the Ukraine has been supplying >90% of US U.S. semiconductor-grade neon, according to estimates from research firm Techcet. About 35% of palladium, a rare metal also used for semiconductors, is sourced from Russia.
What We Think
Display Daily has a indirect connection. One of the contractors that we employ is based in Russia and was involved with anti-war protests at the end of last week. Fortunately, he was not one of those arrested on Friday, but more than 6,000 are now reported to have been arrested across the country. We’re hoping he is still OK. (I just heard he is OK and said that the police ‘do not have enough buses to arrest everyone’, which gives a sense of the resistance in Russia).
Putin seems to have met much more resistance than he expected. It is likely that Russia has the military might to conquer the Ukraine, but I suspect that occupying the country for a longer term to ensure a government that it likes could prove a disaster for Putin and Russia. As has been pointed, many Russians have close contacts and family links with the Ukraine and the resistance from Ukranians will be clear to them. The cost and discomfort that Russia saw from its occupation of Afghanistan will look mild compared to the disruption that it could see in Ukraine, right on its doorstep.
Koran companies were quite quick to get into the Russian market in the days after the Cold War ended. If Korea stops the firms trading with Russia, it would cause some disruption, although Chinese technology product alternatives may be available as China is showing no concern over Russia’s actions.
One of my biggest concerns about the outrageous act by Putin is that it may embolden action by China against Taiwan. The US is clearly not very interested in the role that it occupied for some time as ‘the world’s policeman’ and it would find it even harder to be dealing with challenges on two fronts. That would really send shock waves through the global display and technology industries. (BR)
