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The price of neon is gradually returning to normal - chip manufacturers have found a replacement for gas from Russia and Ukraine.

Published: 2023-01-09

The price of neon gas, which is actively used in the production of semiconductors, began to decline significantly. According to the South Korean portal Korea Posts, the gas used to operate lasers used in the semiconductor industry at its peak has risen in price by up to 19 times last year, but now manufacturers have reasons for cautious optimism.

Last year, there were problems with the supply of neon from Ukraine and Russia, which were the largest suppliers of this gas. From the end of February, consumers began to buy neon in bulk, sending it to warehouses, which only contributed to a further rise in prices.

If the usual price before the start of the Ukrainian events in South Korea was $1285–1606 per 47 liters, then at the peak moment it rose to $24,101. Now the price is gradually returning to the previous level. It is known that today the price of neon in South Korea ranges from $4,000 per 47 liters. However, now it is less than 20% of the peak cost. It is expected that in the foreseeable future it will fall to the level of 2021.

A significant role in reducing prices was played by projects to localize production in Korea. In particular, POSCO and TMC brought neon production and purification technologies to the desired state in the country for the first time. The price of gas also fell due to falling demand for semiconductors in the world. Finally, they began to use more and more actively gas from China, although companies from China predictably raised prices for their products, although their gas was previously considered to be of insufficient quality.

However, Cymer, last year taken over by the Dutch ASML, approved Chinese gas for use in its equipment. ASML and Cymer are the most established manufacturers and their willingness to allow the use of Chinese-made neon in their equipment is of great importance to the entire industry.