Ajit Manocha, president and CEO of SEMI, a global association of companies and professionals in electronics design and manufacturing, said chipmakers are struggling to find replacements for raw materials purchased from Ukraine, primarily highly purified rare gases such as neon, helium and krypton.

“There is no easy backup to the raw materials that are sourced from Ukraine,” Ajit told reporters on the sidelines of the two-day SEMICON Southeast Asia industry conference being held in Penang.

He said the worldwide supply chain crunch is only expected to recover in 2024 as the disruption from the fighting will continue to hinder supplies even as demand surges.

“We have seen an average lead time for equipment manufacturers increasing from three to four months to 10-12 months,” he added.

Factory and transportation disruptions during the pandemic, combined with surging demand for electronics during movement restrictions, have wreaked havoc with product supply chains worldwide, which are now under further strain from the geopolitical pressures of Russia’s invasion of Ukraine in February.

Ajit said there are 92 new fabrication plants coming on line worldwide in the next few years to cater to surging demand for semiconductors, however the situation is not expected to improve until all the plants are up and running.

He said many semiconductor companies are also adding more capacity, which could result in “more balancing” in supply and demand in the next two years.

A primary concern for the industry, according to Ajit, is the lack of chips necessary for toolmakers to manufacture chipmaking machines.

“We now need chips to make chips and we have been leading the call for the industry to prioritise toolmakers,” he said. “The fundamental problem of (the) capacity issue is to get tools and (for) tools, they need chips to make multiple chips,” he added.

Some countries are taking steps to shield themselves from the continuing problems.

India will spend US$30 billion to overhaul its tech industry and build up a chip supply chain to ensure it is not “held hostage” to foreign providers, the country’s top diplomat to Taiwan told Nikkei Asia in an interview last week.

The investment initiative is aimed at increasing local production of semiconductors, displays, advanced chemicals, networking and telecom equipment as well as batteries and electronics, said Gourangalal Das, director-general of the India-Taipei Association, the South Asian country’s de-facto embassy in the Taiwanese capital.