The manufacturing of electronic chips has been hit hard by the ongoing war in Ukraine. 

Neon gas is a key ingredient for making chips, but with two leading suppliers in Ukraine shut down by Russia’s attack on the country, a deeper semiconductor shortage is looming. 

About half of the world's semiconductor grade neon, which is used by lasers that make chips, comes from two Ukrainian companies, Ingas and Cryoin.

Both these firms have had to shut down their operations, according to reports.

The shut down is expected to have a further impact on the production of key components that were already in short supply. 

Chipmakers may have neon stockpiles on hand, but if the conflict drags on, analysts say production will be hit.

“If stockpiles are depleted by April and chipmakers don't have orders locked up in other regions of the world, it likely means further constraints for the broader supply chain and inability to manufacture the end-product for many key customers,” according to Angelo Zino, an analyst at the Center for Financial Research and Analysis (CFRA).

Neon gas is also produced in China, but Chinese prices are rising steadily.