<story><title>Ukraine is a major producer of neon gas, critical for lasers used in chipmaking</title><url>https://www.reuters.com/breakingviews/ukraine-war-flashes-neon-warning-lights-chips-2022-02-24/</url></story><parent_chain><item><author>perihelions</author><text>How is neon extracted and why does one country have a 90% monopoly (in this specific grade)?&lt;p&gt;edit: Found this C&amp;amp;EN story from 2016 that adds context:&lt;p&gt;- &lt;i&gt;&amp;quot;Chip makers, which account for more than 90% of global neon consumption, are already experiencing high prices and some shortages stemming from the Russian conflict with Ukraine, Shon-Roy says. The war, which started in 2014, interrupted global supplies of the gas, about 70% of which comes from Iceblick, a firm based in the Ukrainian city of Odessa.&amp;quot;&lt;/i&gt;&lt;p&gt;- &lt;i&gt;&amp;quot;Iceblick gathers and purifies neon from large cryogenic air separation units that supply oxygen and nitrogen to steelmakers. Most of the air separation units equipped to capture neon, which makes up only 18.2 ppm of the atmosphere by volume, are in Eastern Europe.&amp;quot;&lt;/i&gt;&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;pubs.acs.org&amp;#x2F;doi&amp;#x2F;10.1021&amp;#x2F;cen-09410-notw7&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;pubs.acs.org&amp;#x2F;doi&amp;#x2F;10.1021&amp;#x2F;cen-09410-notw7&lt;/a&gt;&lt;p&gt;This is puzzling to me, because I don&amp;#x27;t get why &lt;i&gt;air separation&lt;/i&gt; should naturally concentrate in exactly one place. It&amp;#x27;s not tied to a rare and localized geologic formation, like helium sort-of is.&lt;p&gt;Also there&amp;#x27;s cryogenic air separation plants all over the planet, why don&amp;#x27;t they do neon too? (Asking in the spirit of curiosity)&lt;p&gt;edit #2: I&amp;#x27;ve just found something that offers a possible explanation and it&amp;#x27;s &lt;i&gt;far&lt;/i&gt; more interesting than I expected:&lt;p&gt;- &lt;i&gt;&amp;quot;Neon was regarded as a strategic resource in the former Soviet Union, because it was believed to be required for the intended production of laser weapons for missile and satellite defence purposes in the 1980s. Accordingly, all major air separation units in the Soviet Union were equipped with neon, but also krypton and xenon, enrichment facilities or, in some cases, purification plants (cf. Sections  5.4 and 5.5). The domestic Soviet supply of neon was extremely large but demand low.&amp;quot;&lt;/i&gt;&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.deutsche-rohstoffagentur.de&amp;#x2F;DE&amp;#x2F;Gemeinsames&amp;#x2F;Produkte&amp;#x2F;Downloads&amp;#x2F;DERA_Rohstoffinformationen&amp;#x2F;rohstoffinformationen-39_en.pdf&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.deutsche-rohstoffagentur.de&amp;#x2F;DE&amp;#x2F;Gemeinsames&amp;#x2F;Produ...&lt;/a&gt; (chapter 5.2)</text></item></parent_chain><comment><author>roughly</author><text>Scale and geographic concentration tend to push prices lower, even if just fractionally, and relatively low costs of transport for basically anything in the world mean there&amp;#x27;s no penalty for buying from far away, so there aren&amp;#x27;t many factors pushing back from geographic concentration. Add to that concentration in other industries - a market with fewer larger buyers means larger average individual demand than otherwise, which pushes towards larger or more concentrated suppliers.&lt;p&gt;Loosely, there&amp;#x27;s a lot of economic push towards concentration, and not a lot pushing against it. Geopolitics usually operates on a slower scale than market pressures, which means we get weird things like a vested interest in Ukrainian national security due to it being the only country bothering to manufacture neon in the world.</text></comment>
<story><title>Ukraine is a major producer of neon gas, critical for lasers used in chipmaking</title><url>https://www.reuters.com/breakingviews/ukraine-war-flashes-neon-warning-lights-chips-2022-02-24/</url></story><parent_chain><item><author>perihelions</author><text>How is neon extracted and why does one country have a 90% monopoly (in this specific grade)?&lt;p&gt;edit: Found this C&amp;amp;EN story from 2016 that adds context:&lt;p&gt;- &lt;i&gt;&amp;quot;Chip makers, which account for more than 90% of global neon consumption, are already experiencing high prices and some shortages stemming from the Russian conflict with Ukraine, Shon-Roy says. The war, which started in 2014, interrupted global supplies of the gas, about 70% of which comes from Iceblick, a firm based in the Ukrainian city of Odessa.&amp;quot;&lt;/i&gt;&lt;p&gt;- &lt;i&gt;&amp;quot;Iceblick gathers and purifies neon from large cryogenic air separation units that supply oxygen and nitrogen to steelmakers. Most of the air separation units equipped to capture neon, which makes up only 18.2 ppm of the atmosphere by volume, are in Eastern Europe.&amp;quot;&lt;/i&gt;&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;pubs.acs.org&amp;#x2F;doi&amp;#x2F;10.1021&amp;#x2F;cen-09410-notw7&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;pubs.acs.org&amp;#x2F;doi&amp;#x2F;10.1021&amp;#x2F;cen-09410-notw7&lt;/a&gt;&lt;p&gt;This is puzzling to me, because I don&amp;#x27;t get why &lt;i&gt;air separation&lt;/i&gt; should naturally concentrate in exactly one place. It&amp;#x27;s not tied to a rare and localized geologic formation, like helium sort-of is.&lt;p&gt;Also there&amp;#x27;s cryogenic air separation plants all over the planet, why don&amp;#x27;t they do neon too? (Asking in the spirit of curiosity)&lt;p&gt;edit #2: I&amp;#x27;ve just found something that offers a possible explanation and it&amp;#x27;s &lt;i&gt;far&lt;/i&gt; more interesting than I expected:&lt;p&gt;- &lt;i&gt;&amp;quot;Neon was regarded as a strategic resource in the former Soviet Union, because it was believed to be required for the intended production of laser weapons for missile and satellite defence purposes in the 1980s. Accordingly, all major air separation units in the Soviet Union were equipped with neon, but also krypton and xenon, enrichment facilities or, in some cases, purification plants (cf. Sections  5.4 and 5.5). The domestic Soviet supply of neon was extremely large but demand low.&amp;quot;&lt;/i&gt;&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.deutsche-rohstoffagentur.de&amp;#x2F;DE&amp;#x2F;Gemeinsames&amp;#x2F;Produkte&amp;#x2F;Downloads&amp;#x2F;DERA_Rohstoffinformationen&amp;#x2F;rohstoffinformationen-39_en.pdf&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.deutsche-rohstoffagentur.de&amp;#x2F;DE&amp;#x2F;Gemeinsames&amp;#x2F;Produ...&lt;/a&gt; (chapter 5.2)</text></item></parent_chain><comment><author>tempnow987</author><text>I think it might be tied to steelmaking? Ie, if you are already doing work to generate oxy and nitrogen, getting a byproduct like neon is easier?&lt;p&gt;So CAN the USA separate air? For sure. Maybe it&amp;#x27;s just cheaper. A lot of these stories about disruptions are disruptions of the CHEAP option.</text></comment>