War in Ukraine: Hit to semiconductor supply could hike prices in Canada
Global News
The Russian invasion of Ukraine threatens hopes for a return to steady semiconductor supplies in Canada's auto sector and other manufacturing industries.
Canada’s automotive sector and other industries gearing up for an end to the chip shortages of the past year might be waiting longer for relief as Russia’s invasion of Ukraine threatens key supply chains in semiconductor production.
Russia’s attacks this week on Ukraine — met with condemnation and harsh economic sanctions from western nations — have sent prices soaring on commodities such as oil and wheat, some of the major exports from the eastern European region now beset by war.
The countries are also a primary source of raw materials critical to the production of semiconductor chips, a critical electronic input that has faced global shortages for the past year tied to the COVID-19 pandemic and related shipping disruptions.
Sarah Prevette, chair of Canada’s Semiconductor Council, tells Global News that exports of neon gas and palladium from Ukraine and Russia, respectively, are key to global development of chips.
“We’ve already seen prices start to jump,” Prevette says. “So the trickle-down effect of the war could potentially spike chip prices, which means that Canadians may end up paying more for their electronics or appliances, or not being able to get them at all.”
Semiconductors are no longer just the foundation of high-tech devices like phones or gaming consoles. Modern appliances like toasters and fridges, as well as cars, now have microchips baked into their systems.
Prevette says while there’s been some global recovery in the availability of chips, supply chains have not yet bounced back to their pre-pandemic strengths.
“I think we need to be prepared for some ongoing shortages to come forward with (the attacks on) Ukraine,” she says.
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