Disruption in global tech industry, supply chain continues amid fears of recession

Europe News Desk!!! The war in Ukraine and sanctions against Russia will continue to disrupt the global tech industry and supply chain in the near future. According to market research firm GlobalData, technical sanctions against Russia will continue to increase. Britain has imposed 1,123 new sanctions against Russia since the start of the war, adding to 215 sanctions already in place. The war also contributed to market uncertainties, which led to large-scale layoffs, especially in the technical sector. In 2022, more than 1,000 companies laid off 154,336 employees, according to data from layoff tracking site Layoff.fi. Nearly 1 lakh people lost jobs in the month of January globally, dominated by companies such as Amazon, Microsoft, Google, Salesforce and others.

In addition, Russia and Ukraine have significant deposits of metals such as cobalt, nickel, platinum, and palladium. Russia is the third largest producer of nickel, with a 10 percent market share, which is used in lithium-ion and electric vehicle batteries. Ukraine has been the world’s supplier of about 50 percent of neon gas and 40 percent of krypton gas—two inevitable by-products in the production of electronic chips. According to a study in the International Journal of Mechanical Engineering, supply disruptions due to the current war have increased the supply of this commodity. are preventing manufacturers from reaching them, making it very difficult to deal with component shortages, late deliveries and high raw material costs. This means that companies that rely on the chips, such as automakers, face production delays as well. According to some companies in Japan and Korea, they can tap into reserves, but the rush to find suppliers outside Eastern Europe is causing shortages and rising prices for not only neon gas but other industrial gases.

It is currently difficult to find a supplier of neon gas other than Ukraine, as the gas must be purified to 99.99 percent purity, a complex process that only a few companies in the world can do. The already strained global semiconductor supply chain was heavily affected by the war. The drop in prices is likely to impact electric vehicle batteries in the near future and reduce the cost gap between ICE vehicles and EVs. The protracted conflict between Russia and Ukraine will continue to impact global growth in terms of output, trade and employment, GlobalData says. Major economies will continue to adopt tight monetary policies to reduce inflationary pressures. In the Global Risk and Resilience Trends and Predictions report, DRI International surveyed nearly 500 resilience professionals across all industries and sectors.

As Forbes reports, the ongoing supply chain crisis and the effects of the Russia-Ukraine war have emerged as top concerns among them, along with geopolitical risks. Issues identified include major supply disruptions, supplier failures, use of single or sole source suppliers, global shortages of commodities and raw materials, transportation problems at docks and depots and of course labor shortages. According to the US Federal Reserve, the Ukraine war is expected to impact not only supply chains, but the entire global economy, as inflation and higher interest rates fuel a possible recession. According to KPMG US, the ongoing Russia-Ukraine war is likely to further exacerbate global supply chain disruptions.

Sanctions in response to the Russia-Ukraine war are having mixed effects on already troubled supply chains, the global advisory firm said. Amid ongoing initiatives to future proof operations, companies now face another test of supply chain resilience due to risks from globalization. Targeted actions that leverage digital capabilities can have near-term impacts on supply chain costs. However, this should not delay the initiation or acceleration of long-term strategies designed to eliminate risk.


World News Desk!!!


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