Russia, Ukraine and data centers

As more and more reports circulate that Russia is on the precipice of invading Ukraine, with no sign of withdrawal, those within the data center and digital infrastructure industry are discussing what it means for the sector.

Omdia has outlined that potential conflict poses a threat to the industry, based on Ukraine’s production of neon gas supply. Three Ukrainian companies (Iceblick, Ingas, and Cryoin) manufacture over 70% of the world’s supply, which is used in semiconductor lithography (specifically deep-ultraviolet photolithography (DUV).

According to TrendForce, semiconductor factories and gas suppliers are “stocked” with supplies from other regions available, too, so while interruptions in Ukraine will not halt semiconductor production lines in the short term, long term, this could lead to higher prices. The last time there was a Russian invasion in the region (2014), the price of neon increased by nearly 600%, causing serious issues, and emerging from the pandemic, there was already an ongoing semiconductor shortage.