Many forecasters, like Peter Zeihan, were predicting economic disaster, disruption and shortages from the Russia-Ukraine war. The over $1 trillion semiconductor chip industry would be wrecked from a shortage of neon gas. 70% of the gas is made by Ukraine and Russia. The prices did shoot up but now have come back down and semiconductor supplies are good.
Chip makers had rare-gas reserves and technology was changed to use a lot less gas, capture and recycle what is used and switches were made to alternatives in other industries. Russia still exported gas to China and China sold its supply to other countries. The most advanced chip processes using EUV (extreme ultraviolet) does not need neon gas. Peter Zeihan does not look at process alternatives or adaptations and mitigations.
The drop in rare gas supply caused a surge in wholesale prices, particularly of xenon, which went from $15 a liter in 2020 to more than $100 in mid-2022. Chipmakers drew on their rare-gas reserves and invested in technology that enables recycling. Other buyers cut usage or switched to alternatives.
Krypton, neon and xenon are by-products of air separation. Lots of oxygen is involved in steelmaking.
Semiconductor chips use excimer laser technology in the deep ultraviolet, with a wavelength of just under 200 nanometers. The excimer lasers used in semiconductor manufacturing use well known laser gases such as argon and fluorine, with neon as a buffer gas.
However as we shift to 5 and 2 nm technology becomes commonplace, the need for neon as a laser gas may decrease significantly. The extreme ultraviolet lasers with 13.5 nanometer light do not use neon gas. The EUV process vaporizes tin.
Neon can be made anywhere, by distillation of liquid air, but with neon having a mass fraction of one part in 79,000 in the atmosphere, the gas will be expensive.There are solutions, however. In the short term, the Taiwanese major TSMC is recycle and purify spent neon for recycling and the laser makers themselves are optimizing operating procedures to reduce neon consumption.
Xenon is usually used as an anaesthetic but can be swapped with nitrous oxide. Different gases, similar to argon or nitrogen, can be utilized rather than krypton in triple-glazed home windows. Krypton and xenon are used as propellant in satellite tv for pc thrusters. Starlink satellites launched by SpaceX now use argon as an alternative.
Retrofitting air-separation crops with faucets that enable rare-gas mixtures to be extracted is expensive and halts manufacturing for 2 or three months. New construction has air-separation faucets put in. Russia diverted exports to China. China then had a surplus and exported its supplies. Japan is using a strategy to enhance home manufacturing via a mix of retrofitting and new crops. South Korea goal is to be self-sufficient in uncommon gases within two years.
TSMC is evaluating supply chain risks and has continuity plans for about “the next five years” to make sure it can source more than 2,000 chipmaking materials and chemicals to meet expansion plans. TSMC has helped its suppliers buy materials, chips and components and tried to coordinate among different suppliers to identify bottlenecks in the supply chain.
TSMC developed the first system for turning liquid waste from used hydrogen fluoride — a chemical used for cleaning wafers — into high-purity cryolite for use in the aluminum industry.
TSMC hopes to eventually turn used hydrogen fluoride back into fluorite, the raw material it is made from. China and Mexico control nearly 70% of global fluorite output. Reclaiming fluorite from hydrogen fluoride, Lin says, would help suppliers use fewer raw materials and significantly reduce carbon emissions.
Lin said that ideally, all materials will be able to be recycled and used in chipmaking.
Taiwan was able to source more than 60% of its indirect materials — including chemicals and gases, but excluding wafers — locally as of 2021. The figure for the U.S. was 89% and 33% for China.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.
“Krypton and xenon are used as propellant in satellite tv for pc thrusters.”
Amazing stuff!
Just to show you and your friends the dangers of simple extrapolations..
Yes. Lots of drama from Peter Zeihan. My main beef with him are his claims that the world’s oceans will become a piracy free for all when the US withdraws the navy. This is a long bow to draw and doesn’t reflect the fact that other self interested countries will step up to preserve the order IMHO. Time will tell I suppose.
The issue is more that when those groups butt heads about whose ships get to sail where, it could get messy. It’s an introduction of risk into an otherwise pristine environment and risk is anathema to big shipping. Not simply because you might get interdicted, but because figuring out who can ship where via what trade route will be expensive, or at least more expensive than the status quo of today, which is “Yes.”
The US Navy isn’t going anywhere, and other nations have shown no inclination to lift a finger to preserve world order.
The UK used to license privateers, seems like a lucrative avenue for the US to recover a small fraction of the expense of keeping peace. We can sell insurance.
Can confirm. We use krypton in laser tube manufacturing, with occasional xenon and fluorine for excimers. The price of a lab bottle sized canister of kr exceeded my mortgage payment.
Peter makes mistakes, as do you.
“Its tough to make predictions . . . especially about the future” Yogi Berra
And I still love you both.
I have a public record for many of my predictions. 90% right. https://www.metaculus.com/accounts/profile/110947/
Zeihan has been predicting the collapse of China for 14 or so years.
Look at his premises and reasoning.
https://www.nextbigfuture.com/2018/11/peter-zeihan-makes-bad-predictions-with-bad-premises.html
Zeihan postulates that because the US economy is not needing much world trade that the US will abandon protecting the world’s sea routes and world trade will collapse.
The US will not need to import oil by 2020. This is asserted by Zeihan and Nextbigfuture somewhat agrees that the US did import oil by 2020. However, the US started importing more oil again. Also, even if the net imports heads towards zero, there are imports of lower grade crude for he large US refining and then refined oil products are re-exported.
Drill in ont he details.
However, Nextbigfuture notes that the US will start exporting large amounts of oil, coal and liquid natural gas. Nextbigfuture does not believe that the fracking will stay at breakeven between production and demand.
Zeihan predicts that America will withdraw from its global cop role.
Zeihan predicts that without America as cop that world will go into fighting and chaos and world trade will collapse. This will be followed by the collapse of countries. The US keeps in its role of engaging geopolitical to achieve its desired results.
Also, the US is not monolithic. The US has the interests of its military and Raytheon and Lockheed etc… The US can engage in Ukraine to increase arms sales for those companies.
Zeihan predicts that Germany’s economy will collapse to one-fourth its current level without trade in a world of Chaos or that Germany collapses because of natural gas.
Zeihan predicts China will break apart without world trade or will be united but very poor.
Zeihan has an implicit prediction that neither China or any other power would step into any power void left by the withdrawal of the USA.
Zeihan has been predicting the rise of Japan, Turkey and Argentina in a world of Chaos.
Review what he has been saying and why he ended up being wrong.
No question who is the better predictor between you and Peter,but that isn’t saying much.
So,Brian,will Starship lift off and land first stage this month?
I know they don’t actually land the SH but do a hover maneuver.
What are the odds we have launch in one month 2 months,3 months ect. Pretty exciting.
First launch attempt window is April 17 Monday morning. 30% chance for Monday, 70% for this week. 50% chance of reaching orbit and 25% of completing the mission plan. Second launch attempt could be in about 2-3 months.
I’ve been watching Zeihan’s Youtube videos and I think when he sees a single degradation in the world, he makes conclusions from that one change, assuming nothing else changes. But he doesn’t realize that humans will usually take action and reduce the damage.
He predicted, based on the Russian panic retreat at Kharkiv, that the Ukrainians would obtain huge supplies of Russian armour after the Russian retreat from Kherson. But he didn’t realize that the Russians learned from their Kharkiv debacle and performed an orderly retreat from Kherson, losing very little equipment.
He predicted Europe would freeze this winder and the German economy would contract after Russian natural gas supplies were cut off. But he didn’t realize that Norway would increase their supply of natural gas and that Germany would buy up LNG from world markets (at very high prices). Also, as an economist once said, the cure for high prices is high prices. When the price of natural gas increased, people reduced their consumption, solving the problem.
Zeihan predicted mass starvation and revolutions in the Middle East because Ukrainian and Russian wheat exports would be halted. But he didn’t realize that even though both sides were at war, it was in the interests of both countries to continue to export grains. So Turkey brokered a deal and grain exports continued from both Ukraine and Russia.
In the case of neon, Zeihan noticed that the war halted neon production. No neon meant no semiconductors, and he predicted economic disaster. He didn’t realize that obtaining neon from Russia and Ukraine was merely the cheapest way to get that gas. There were several techniques and substitutes were were more expensive but would work. So all that happened was that manufacturing chips became more costly. But it never went to zero.
It’s true that some things are unavoidable. When large numbers of childless women reach the age of 40, they’re not going to have children. When large numbers of childless men and women decide they’re not going to have children, it turned out that it’s virtually impossible to change their minds. So Zeihan’s prediction of demographic collapse in Asia and Europe are very likely going to come true.
But I’d be wary of believing Zeihan when he makes predictions about military and manufacturing issues. He’s right when he notices problems. He’s almost always wrong to assume that those problems will lead production to fall to zero. What happens is that production becomes more expensive.
“[Zeihan] predicted Europe would freeze this winder [sic] and the German economy would contract after Russian natural gas supplies were cut off.”
That it did not happen has less to do with Norway increasing their natural gas supply, and rather more to do with the Europe having the second-mildest winter in the last century…. From which we can derive that Peter is not much of a weatherman. He is suggesting that the risk of major problem with natural gas will still remain for this coming winter, because much of Germany’s electrical production, industrial feed stocks, fertilizer production, and home heating relies upon natural gas….and that is unlikely to have changed by this coming winter.
https://www.nytimes.com/2023/04/06/business/energy-environment/ukraine-russia-war-europe-energy.html
With Russia’s Exit, Norway Becomes Europe’s Energy Champion
https://oilprice.com/Latest-Energy-News/World-News/Norway-Replaces-Russia-As-Germanys-Top-Gas-Supplier.html
Norway Replaces Russia As Germany’s Top Gas Supplier
Norwegian oil and gas exports were part of the solution, as were increased imports of LNG. There’s no doubt that the warmer weather and reduced demand were factors as well.
My point was that Zeihan was completely wrong about the impact of neon on semiconductor production and about grain exports to the Middle East. He was completely wrong that Europe would run out of natural gas last winter. Demand for natural gas fell by about 14%, probably due to the warmer winter. Russia used to supply 52% of natural gas to Germany, Norway now supplies 33%. So you can see that the gap between supply and demand isn’t that large and will likely be made up by increased LNG imports.
Recently the Germans shut down their last three nuclear power plants. That’s a strong sign that they don’t anticipate a shortage of natural gas in the future.
Predicting the future is very hard. Zeihan’s demographic predictions are very likely completely right. His Ukraine-Russia war predictions have been wrong (so far) and his energy predictions were mostly or almost completely wrong.
His prediction about global trade failing because the US is retreating from policing the oceans remains to be evaluated. I suspect China is building up its blue water navy for two reasons. One is to replace the US Navy in the Pacific and cut off China’s neighbors from American influence. The other is the replace the US Navy in protecting ocean trade with China, since it appears the US no longer believes that global trade is in its national interest.
Will global trade go to zero if the US retreats? As long as China can keep their economy working by importing raw materials and exporting goods, I think China will maintain a large navy to protect their global trade.