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In an effort to bolster supply chain resilience, Taiwan’s leading chip manufacturers are set to begin domestic production of neon gas by 2025, in partnership with local steel and gas firms.
What Happened: Apple Inc. and Nvidia Corp. key chip supplier Taiwan Semiconductor Manufacturing Co. (NYSE:TSM), Winbond, and United Microelectronics Corp. (NYSE:UMC) are leading this initiative. This move aims to secure a stable supply of neon gas, a key chipmaking material, which was previously disrupted by the Ukraine war, Nikkei Asia reported on Tuesday.
Winbond is partnering with Linde LienHwa, a top industrial gas supplier, and China Steel, the largest local steel maker, with plans to commence local output by 2025. Neon gas, primarily produced by large-scale steel plants, is crucial in the lithography step of chipmaking.
United Micro is considering purchasing locally produced neon gas from Linde LienHwa, while TSMC is actively working with suppliers to mitigate supply chain disruptions.
Why It Matters: This initiative to localize neon gas production is a significant step towards enhancing supply chain reliability for the Taiwanese semiconductor industry. TSMC began looking for local sources of neon gas after Vladimir Putin‘s war in Ukraine caused a major supply crunch.
Furthermore, Taiwan’s Economy Minister, Kuo Jyh Huei, had previously highlighted the critical role Taiwan plays in the global semiconductor industry. The move to localize neon gas production further underscores this role and the nation’s commitment to maintaining a robust and resilient semiconductor supply chain.
Price Action: At the time of writing, TSMC was trading 2.03% lower in the pre-market while UMC was down by 1.14%, according to Benzinga Pro.
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Photo by Sundry Photography on Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
