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This Giant Is Filling in the Ukrainian Supply Hole

Written by Luke Sweeney
Posted November 28, 2022

Russia’s nonconsensual reorganization of Ukraine’s economy rattled the global market. 

Food production took a slight hit, as Ukraine exports around 10%–15% of a few critical crops. Steel saw a slight jump in pricing, as did the cost of some specialty manufacturing equipment. 

But one industry was almost completely taken offline by the invasion. 

One critical part of the tech sector relies heavily on a material made almost exclusively in Ukraine. 

As of 2020, Ukrainian refineries were producing up to 90% of the world’s total supply. 

As of today, that number is exactly 0%. 

It’s another major hit to not just Ukraine’s economy but the entire planet. Without this unique gas, some of the most advanced computer chips are impossible to make. 

There’s no way to scale up production in time to prevent another shortage. 

If you thought the past few years were bad, wait until 90% of the semiconductor industry shuts down completely. 

Prices for chips would skyrocket yet again. Factories would shut down, leaving cars and computers half assembled on production lines. 

In the blink of an eye, one of the world’s most critical tech industries could crash. 

We Can’t Afford to Let That Happen

The amount of money in the semiconductor industry is mind-blowing. Each fab can cost hundreds of millions of dollars to build, and that's not even mentioning the cost of training its army of engineers. 

The semiconductor shortage brought on by the pandemic cost the world trillions, but it slowly returned to normal as the industry adapted. 

I don’t foresee the industry adapting quite as well to a 90% shutdown. 

Taiwan Semiconductor (TSMC) is the largest chipmaker on Earth. It produces around 80% of the world’s top-tier computer chips. It will be one of the hardest hit during this upcoming shortage.

It could even knock the company out of its position as the world’s No. 1 semiconductor manufacturer. 

That’s a risk TSMC is not willing to take. So it’s planning to do what any self-respecting giant would do: fill in the hole itself. 

Management is reportedly talking with multiple suppliers to lock down a new supply chain. The danger of foreign powers meddling in the economy is a danger that Taiwan knows all too well. 

The only problem? The shortage is happening now.

It’s not coming in three or five years when new sources can finally be locked down. 

It would only take a few months without this gas to cause major damage to the company’s bottom line. 

Try as it may to stave off the crash, TSMC is still years away from creating its own secure supply chain. 

The companies that will profit from this dangerous crash are already prepared today. In fact, this team managed to see the future and shore up its supplies years ago.

I don't know about you, but this is where I would put my money.

To your wealth,

Luke Sweeney
Contributor, Energy and Capital

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Luke’s technical know-how combined with an insatiable scientific curiosity has helped uncover some of our most promising leads in the tech sector. He has a knack for breaking down complicated scientific concepts into an easy-to-digest format, while still keeping a sharp focus on the core information. His role at Angel is simple: transform piles of obscure data into profitable investment leads. When following our recommendations, rest assured that a truly exhaustive amount of research goes on behind the scenes..

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