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Russia's ongoing war with Ukraine has affected many American automakers. This war has forced many companies - such as Ford & General Motors - to close many of their factories in Russia and Ukraine and has also caused problems with the supply of spare parts and the supply of electronic components.
This crisis appears to be escalating, as do automakers' hopes that "the catastrophic chip situation will be resolved shortly".
The biggest issue that will impact US automakers is the shortage of neon. Neon is a gas used by lasers in chip manufacturing, and according to the advisory services business Techcet, Russia and Ukraine supply nearly all of the US supply of neon, as well as 70% of the global supply.
Thus, Russia produces neon, which is a byproduct of steel manufacturing, as it is purified by a specialized Ukrainian company.
In addition to neon, automakers also source aluminum, nickel, palladium, and iron from Russia and Ukraine for use in chip manufacturing.
Prices for neon and other materials such as palladium, which is used to make semiconductors and catalytic converters, are expected to rise as a result of the outbreak of the Russian-Ukrainian war.
But Dan Hearsch, a managing director in the automotive and industrial practice at AlixPartners, told Automotive News Europe: "The Russian invasion of Ukraine shouldn’t cause immediate problems in the auto industry because companies making microchips have built of several months’ worth of neon stock".
Nevertheless, automakers are still concerned, due to the possibility of major setbacks in their plans to recover from the semiconductor crisis, as BMW was forced last week to temporarily stop operations of two factories in Germany, and a Mini plant in the United Kingdom; This is due to disruptions in the supply of electrical wires made by a German company based in Ukraine.
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