Taiwan sees limited impact from Ukraine war on chip supply chain

According to the Taiwanese government, the war in Ukraine will have little influence on the availability of essential raw materials for semiconductors.

Taiwan is a major chip producer, home to the world’s largest contract chip maker and Asia’s most valuable listed firm, TSMC, and critical to alleviating a global semiconductor shortage that has prompted auto production lines to close in some cases.

Following a meeting presided over by Vice Premier Shen Jong-chin, the cabinet stated that three essential raw materials for producing chips – the gases neon and C4F6, as well as the metal palladium – will have little influence. Russia manufactures neon, C4F6, and palladium.

Taiwanese chip producers utilise little palladium, and neither Ukraine nor Russia are key sources of the metal, according to the cabinet. Domestic companies may also purify and “remanufacture” palladium, so there should be no impact, according to the report.

For neon and C4F6, there are already stocks on the island and supply chains are diversified, so “the near term impact is not big” according to the Cabinet.

Taiwan’s energy supplies are likewise safe, with 145 days of oil reserves and multiple supply sources, while liquefied natural gas, or LNG, also has diverse supply sources, according to the report. Taiwan’s government said on Friday that it would impose penalties on Russia for its invasion of Ukraine, though no details were provided, and the island’s exports to the country are modest. more info

On financial markets, the cabinet stated that the Taiwan dollar’s exchange rate was reasonably stable, but that the central bank would keep a close eye on the situation and adopt “proper management measures” if necessary.