Stay at the forefront of the industrial gas industry with a gasworld subscription and get access to:
The specialty gas industry, vital to various sectors such as semiconductors, biotechnology and medical, is grappling with numerous challenges that threaten its stability and growth. These challenges were discussed at gasworld’s ongoing European Specialty Gas Summit 2024, where industry leaders continue to share their insights on the key issues facing the sector today. Portable Gas Can
The Covid-19 pandemic exposed significant weaknesses in Europe’s production capabilities, revealing a heavy reliance on imports. In 2020, Europe produced only 9% of global semiconductors, down from a more substantial share in previous decades.
“The same is true for global steel,” said Katleen Boeckx, Business Director Electronics at Nippon Gases. “Europe had been producing 26% of global steel in the 1990s, while only 8% of that remained in 2020.”
This dependency on imports was further highlighted by supply chain disruptions caused by the Suez Canal blockage and the Russia-Ukraine war, which severely impacted the supply of rare gases like neon.
Katleen Boeckx, speaking at gasworld's European Specialty Gases Summit.
The industry also faces delays in regulatory approvals and permitting processes, particularly for the handling of dangerous and toxic materials. From investment decision to operational capacity, it often takes two and a half to three years to see results, putting Europe at a disadvantage compared to regions with more streamlined processes.
“It takes an awful lot of time and we have to realise that we are competing with more agile regions that have less regulatory hurdles to overcome versus us,” added Boeckx.
Labour shortages and talent acquisition
Another critical challenge is the shortage of skilled labour. The semiconductor industry, in particular, struggles to find the necessary talent. Despite initiatives like the Netherlands’ Beethoven project, which allocates € 2.5bn ($2.7bn) to technical education, there are concerns about whether these efforts will be timely and sufficient to meet the industry’s needs.
Financial support disparities also pose a significant challenge. The European Chip Act provides €43bn ($46.6bn) in subsidies, which pales in comparison to the $255bn ($276bn) from the US Chip Act and South Korea’s €390bn ($423bn) investment in their semiconductor industry.
Sustainability goals, particularly the route to carbon neutrality, are another critical concern. The future of specialty gases such as NF3 and various fluorocarbons remains uncertain due to regulatory ambiguities. This uncertainty makes it difficult for companies to justify transformative investments in these molecules, as they lack clarity on whether such investments will be viable long-term.
There is also growing concern about PFAS products in the semiconductor industry. These man-made chemicals have been used in industry and consumer products worldwide since the 1940s.
“They’re everywhere, they’re in plastics, they’re in photoresist, they’re in fluorocarbon gases but they are also detrimental to human health,” said Lita Shon-Roy, President/CEO and Founder at TECHCET.
“This is an area that the EU is fully aware of, and the US is also contending and evaluating regulations in this area, but the semiconductor industry cannot do without these materials.”
At the moment, there are alternatives that are coming into play but they are not yet developed enough to be used in chip manufacturing.
The industrial gas industry is grappling with significant challenges arising from geopolitical tensions, particularly between the US and China. Over the past five years, strained relations have impacted materials and product supply chains globally.
While issues between Japan and Korea have eased, the conflict between China and other nations, particularly regarding intellectual property, persists, albeit under better control except with the US.
The primary concern lies in the ongoing trade war between the US and China. “The largest trade issue here is that China and the US continue to spar with regard to tariffs,” said Shon-Roy.
Currently, the US imposes a 25% tariff on Chinese products, with increasing restrictions on technology-oriented imports that could advance China’s technological edge, especially in semiconductor production.
“China, in turn, has announced export controls on gallium, germanium and graphite all touching upon the semiconductor market. There hasn’t been any real blockage of exports, but there has been some curtailment that has caused price increases.”
This situation poses a continuous challenge for the industrial gas sector. With an upcoming US election, the likelihood of changes to these tariffs remains uncertain.
Iridium 191 Anthony Wright is the Global News Journalist for gasworld, having joined the company in May 2021.