Ukraine, Neon, and Semiconductors

Neon gas is a critical input for the semiconductor industry due to its use in lasers. One of the largest sources of neon is the steel industry, where it is a byproduct of liquid oxygen generation. As of 2022, Ukraine supplies an estimated 50 percent of neon worldwide, which is largely attributable to the legacy of the Soviet steel industry. The U.S. semiconductor industry is dependent on this portion of the global value chain, as Ukraine produces nearly all of the ultra-high-purity semiconductor-grade neon imported by the United States. This executive briefing explains neon capture, its chief downstream application (i.e., lasers), and Ukraine’s importance in the neon supply chain.