Russia and Ukraine together are the largest producers of some of the world’s rare gases. As the conflict between the two countries continues, supplies of these gases are shrinking. To make matters worse, in response to several sanctions against Russia, the country will ban the supply of these gases to some companies. It is important to note that at present Ukraine cannot guarantee supplies. Areas where Ukraine produces these gases are either under Russian control or heavily affected by Russian bombs. Neon and helium are important gases in chip production and their shortage will lead to chip shortages. However, major chipmakers such as Intel, ASML and Micron are confident in their stocks. They say they have enough storage of these gases to survive the conflict. In addition, Chinese gas suppliers are now taking advantage of the situation.
Read also: Russia bans exports of inert gases such as neon and helium
In the face of neon gas shortages, there is a shadow of the rapid growth of Chinese gas suppliers. Special gases refer to gases that are used in specific areas and have special requirements for purity, variety and properties. Mixed gases such as neon, krypton and xenon are a type of specialty gas.
The semiconductor industry needs many types of special gases. The chip production process requires more than 50 types of special gases for silicon wafer production, oxidation, lithography, thin film deposition, etching, ion implantation and other processes.
In the field of electronic specialty gases, the German Linde Group, the French Air Liquide Group and the American Air Products Group are the three largest suppliers of gas in the world. Together, they represent 70% of the global market share of e-gas in 2019.
Chinese gas suppliers
Among China’s gas suppliers, Huate Gas, which was established in 1999 and was included on the Science and Technology Innovation Board in 2019, is a representative of China’s special gas players. Walter Gas is the first company in China to break through high-purity hexafluoroethane, high-purity trifluoromethane, high-purity octafluoropropane, high-purity carbon dioxide, high-purity carbon monoxide, high-purity nitrogen oxide, and Ar / F / Ne gas mixtures. It is also the only gas company in China to have passed the certification of ASML and Gigaphoton, a Japanese lithograph machine, a supplier of laser light sources.
Under the oligopoly of foreign gas companies such as Germany’s Linde Group, France’s Air Liquide Group, America’s Air Products Group and Japan’s Showa Denko, Walter Gas’s coverage rate for Chinese manufacturers of 8-inch integrated circuits exceeds 80 percent. Its clients include SMIC, Huahong Grace, Yangtze Memory, Wuhan Xinxin, China Resources Microelectronics, TSMC (China), Hejian Technology, Silan Micro and others. In addition, Chinese gas suppliers are already receiving orders from foreign companies such as Intel, Micron, Texas Instruments, SK Hynix and others.
Read also: The price of high-quality neon gas has risen more than tenfold since Russia imposed the ban
Walter’s gas supply is moving to China from Ukraine
Following the conflict between Russia and Ukraine in 2014 and 2015, companies saw the need to relocate from Ukraine. Walter’s supply of neon gas, as well as krypton gas, shifted from Ukraine to China.
According to Walter Gas’ prospectus for 2019, the supply of raw neon gas comes mainly from Chinese gas suppliers. Some of the companies include Beijing Shougang Oxygen Plant, Linyi Qiyuan Gas Co., Ltd., Handan Handan Iron and others.
Its supply of krypton gas also had to be moved from EAST RAY DISTRIBUTIONS LTD to Anhui Tianlang Gas Development Co., Ltd., Beijing Shougang Oxygen Plant, French Air Liquide Group, South Korea KOREA NOBLE GAS CO., LTD and other companies.
In April this year, Walter Gas announced that it would issue convertible corporate bonds. These bonds will be to raise funds to build a project to build a semiconductor material. The target production for the project will be 1764 tons per year. In addition, the company plans to invest at least 466 million yuan. According to the company’s schedule, this plant will start production in about two years. Upon completion, it will produce high purity carbon monoxide, high purity nitric oxide, hexafluoropropane and isomers. It will also produce hydrogen bromide, boron trichloride, ultra pure hydrogen, ultra pure krypton, ultra pure neon, ultra pure helium and ultra pure xenon.
