Chip makers withdraw from Russia over Ukraine war

Business news | March 8, 2022

By Nick Flaherty

Ukraine

Chip makers have been varied in their response to the war in Ukraine.

“As so many, we feel shocked in the face of this blatant violation of international law and values of humanity,” said Infineon Technologies in a statement. “We are watching with dismay that it is escalating further. We appeal to the aggressor to give way to end this fight and to solve the issues in a peaceful way as civilized nations do. We join the global community in speaking with one voice and the clear message: This war against Ukraine must end. All governments should unite to take all needed measures to achieve this.”

US and EU sanctions restrict the shipment of US technology to Russia, and Fedex, UPS and DHL have all suspended shipments to Russia, Ukraine and Belarus.

“As a US-based company, Analog Devices is committed to full compliance with US laws, including U.S. export controls, trade sanctions and regulations. We have taken necessary steps to comply with the recent US sanctions against Russia, and we expect that this will be an immaterial impact to our business,” said the company.

In addition, Apple and Samsung have suspending sales of consumer technology, Intel and AMD have suspended direct sales of x86 processors, and Dell, IBM and Microsoft have all suspended sales.

However Russia is a small market for semiconductors.

“While the impact of the new rules to Russia could be significant, Russia is not a significant direct consumer of semiconductors, accounting for less than 0.1% of global chip purchases, according to the World Semiconductor Trade Statistics (WSTS) organization,” said John Neuffer, president and CEO of the Semiconductor Industry Association (SIA). “The broader Russian ICT market totaled only about $50.3 billion out of the $4.47 trillion global market, according to 2021 IDC data,” he said.

Other European chip makers have cited the sanctions.

“In line with the sanctions, Nexperia complies with all applicable laws and regulations and is fully committed to complying with the new export control rules announced by US, UK, EU, and others. Nexperia does not and will not have any direct business or cooperation with institutions in Russia, Belarus or Ukraine,” said the company.

NXP says it is monitoring the situation in Ukraine closely and is implementing measures required by law in the jurisdictions in which it operates. “NXP’s primary concern is for the safety of everyone in the extended area, including our employees,” it said.

However it stops short of calling the situation a war.

“We cannot predict the secondary effects or long-term supply chain disruptions that might result from extended hostilities in Ukraine. Based on current information, NXP does not expect issues related to the supply of materials from the region for the foreseeable future,” it said.

Russia is also a leading supplier of neon, argon, xenon and krypton for chip making, with neon, lithium and palladium from Ukraine. According to market researcher TrendForce, Ukraine supplies 70% of the world’s supply of neon.

Chip makers say they have at least a year of these chemicals in the supply chain. “The semiconductor industry has a diverse set of suppliers of key materials and gases, so we do not believe there are immediate supply disruption risks related to Russia and Ukraine,” said Neuffer at the SIA.

Infineon points to the need for humanitarian support.

“Immediate help is required by the growing number of refugees and victims of the fights in Ukraine. As a company, we have decided to support relief organizations financially. We are fully aware that this is like a drop in the ocean. Yet we are confident that this drop comes with many other drops from the international community,” said Infineon.

Apple is tripling employee contributions to Ukrainian support funds, while Intel says it has raised $1.2m in support.

“We are working to support all of our employees through this difficult situation, especially those with close ties to this region,” said Intel. “We have launched an employee donation and matching campaign through the Intel Foundation that has already raised over $1.2 million for relief efforts, and we are proud of the work our teams in surrounding areas including Poland, Germany and Romania are doing to aid refugees. We will continue to stand with the people of Ukraine and the global community in calling for an immediate end to this war and a swift return to peace.”

NXP, ST Microelectronics and Texas Instruments have also been approached for comment.

www.infineon.com