The World Trade Organization (WTO) reported that of the total world demand for neon, Ukraine meets about half.
Neon gas is a key input for the semiconductor industry for its use in lasers.
In a report on Ukraine, the WTO stated that Ukraine’s commodities play a key role in global and regional value chains.
World demand for neon
According to the U.S. International Trade Commission (USITC), neon is known for its bright colors in signage, but it also has a key use in neon gas lasers. In fact, the semiconductor industry demands up to 90% of these lasers.
In chip manufacturing, a mixture of gases, called excimer gas, produces the deep ultraviolet light needed for photolithography. Within this mixture, neon acts as a buffer and carrier gas. Its role is key to reducing defects and improving chip performance.
Manufacturers in the United States must ensure that the excimer gas meets purity and quality standards. Validation of a gas source can take anywhere from 3 to 18 months. If a customer decides to change supplier, the process must be repeated.
Raw materials
In particular, the WTO noted that Ukraine has very good prospects as a major global supplier of essential raw materials such as titanium, lithium, beryllium, manganese, gallium, uranium, zirconium, graphite, apatite, fluorspar and nickel, many of which are critical to the defense, electronics, aviation, medical and green energy industries.
As for the globalized semiconductor sector, Ukraine meets about half of the world’s demand for high-purity neon. In addition, as a dominant exporter of seed oils (accounting for 46% of global production), Ukraine is linked to the global cosmetics industry, which uses seed oils as an input for the production of moisturizers.
Neon gas is a key input for the semiconductor industry due to its use in lasers. One of the largest sources of neon is the steel industry, where it is a by-product of liquid oxygen generation.
As of 2022, Ukraine supplies approximately 50% of the world’s neon, which is largely due to the legacy of the Soviet steel industry.