In a move announced by the Government of the Russian Federation, the export of inert gases from Russia will be restricted through the end of the year. The scope covers all inert gases, including neon, argon, helium and others. Neon alone accounts for about 30% of global consumption supplied by Russia. These gases are essential in semiconductor manufacturing, the process that yields microcircuits. Industry observers note that the measure appears aimed at economies that have imposed sanctions on Russia.
Put simply, the policy means Russia will limit foreign sales of inert gases to exchanges for microelectronics. The semiconductor crisis that began a year ago intensified after the events of February. The question now is how this restriction could ripple through the automotive sector and related supply chains.
Expert opinion
Nikita Gudkov, Deputy editor of the magazine Behind the Wheel, weighs in:
“Supply disruptions in semiconductor production could trigger more than just export constraints from Russia. They might threaten Ukrainian deliveries as well. Some reports indicate Ukraine supplied as much as 90% of the neon used in the United States, a gas critical for lasers that etch microcircuits. Yet roughly half of global inert gas production occurs in China, a figure that has risen since 2015. The production of these substances relies on metallurgical by-products for raw materials, a pathway that, with effort, can be established elsewhere. In the near term this adds to the existing strain on the electronics supply chain for vehicles. Still, it is not clear that such sanctions will be a lasting solution.”
Regarding inert gases, attention should also turn to another bottleneck. Vehicle air conditioning depends on freon R134a, a refrigerant reportedly not produced domestically in Russia. Last year, however, a licensing regime for the import and export of such refrigerants was introduced, driving prices up fivefold. Completing a full air conditioning recharge today can cost 3-4 thousand rubles, plus a small labor charge. Even if a shortage is unlikely because shipments continue from China, the policy underscores the potential value of domestic substitution in cooling systems as well.
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