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The tension fostered by the scarcity of rare earth creates the need to diversify the sources of raw materials.

The continuous metamorphosis of the world market requires timely adaptive capacities dictated by turbulences that are putting optimal economic stability to the test. The Russian invasion of Ukrainian territory, translated into the current military conflict, has not spared the semiconductor industry. In 2021, a severe shortage of rare earth caused deep global tensions, jeopardising the immediate opportunity to meet growing demand. The current conflict is helping to make this crisis even more pronounced, penalising the global (electronics, hence, automotive) industry. In fact, Ukraine, together with Russia, is the main country involved in the supply of noble gases such as neon, argon, xenon, and Crypton. In particular, Ukraine is heavily involved in the extraction and production of neon, controlling 70% of the world’s supplies, which is necessary for the development of the lithography phase, a decisive step in the final fractioning of chips, while Russia contributes over 40% of the supply of palladium.

The problem is so significant that institutions are also moving to try to solve it. Europe, for example, is pushing for the creation of an alliance of chips capable of doubling domestic production by 2030. In the short term, the European Community has promulgated a series of legislative and financial measures with the aim of strengthening competitiveness and resilience with respect to semiconductor technologies and applications by reinforcing technological leadership: this is the European Chips Act, a plan that aims to reduce dependence on foreign producers, seeking to ensure greater security for the entire semiconductor supply chain.

 

Source: www.agendadigitale.eu
Sources of images: Pixabay.com; Storyset.com

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