First the pandemic, now Russia-Ukraine war can make problems worse as chip shortage, supply chain issues drag on
CHICAGO (CBS) – The global chip shortage has been dragging on since the start of the pandemic. As the Russia-Ukraine crisis escalates, the supply chain may feel more strain.
CBS 2 Morning Insider Tim McNicholas speaks with a suburban chip maker about its concerns.
"So, what is this that we're looking at here."
Eventually.
"I was working with the engineers and we're working on a new program."
These will be much more than just drawings on a board.
They're the blueprints for computer chips designed by a Batavia-based company called NHanced Semiconductors.
"Our customer base is, a lot of things for the U.S. government, the military, aerospace, we do some medical devices."
Company President Robert Patti says this project is moving along smoothly.
"Those are separate little chips."
But it's getting harder to turn ideas into reality.
For example, NHanced recently designed a chip for another project and the customer ran into several roadblocks getting it manufactured due to backlogs and supply chain challenges.
The response from one company?
"He said ya know what, we're full. So, we can't actually give you parts for a year. My customer was like, I have customers I need parts in six months. Couldn't do it," Patti said.
After hitting a brick wall with one other supplier, that customer finally found someone able to make it work.
Patti says stories like that are becoming more common across the industry as supply chain challenges drag on.
"The last year really has exposed to the world the supply chain issues. Many of them had been there."
And market analysts say the war in Ukraine could soon make problems even worse.
Because Ukraine and Russia produce a large percentage of neon and palladium -- both commonly used to make computer chips.
NHanced also manufactures certain chips at a facility in North Carolina, but luckily, he says that hasn't been affected much.
Tim: Do you think it could be an issue down the road of this conflict continues?
Patti: Oh, it will, and for some materials, you can find other alternatives that may work but it may be more expensive.
Patti says the chips NHanced creates are so niche that NHanced hasn't been hurt by the supply chain challenges too badly.
So, he'll keep chipping away.
