The Impact Of Russian-Ukraine Conflict On The World Of Technology

HomeTechnologyThe Impact Of Russian-Ukraine Conflict On The World Of Technology


What is the Russian-Ukraine conflict?

The Russian-Ukraine Conflict has been happening for years. But why did it suddenly appear in the hot picture? At the start of this month, Russia employed its military troops on the borders of Ukraine, a former country under the Soviet Union Republic, Russia. Many countries like the United States of America, France and Germany have been trying to convince Russia to pull back its forces. Still, Vladimir Putin, the President of Russia, has been tightly mouthed regarding the conflict.

Ukraine has many emigrants from several countries, and many countries are warning their citizens to return to their respective countries immediately after sensing the severe tension. This issue started when Ukraine wanted to join the North Atlantic Treaty Organisation, popularly known as NATO. NATO has member countries like the UK, France and Germany. But the problem is the United States of America, the arch-rival of Russia, is also part of the organisation. So Russia didn’t want any of its former Soviet Union countries to be a part of the organisation, in which the USA is a major part.

Why is it concerning?

Everyone senses war, and the diplomacy shown by Russia after suddenly pulling back the military troops is something similar to that happening before the war. The NATO organisation chief has warned Russia of the consequences, and the US tries to instil some sense by highlighting the catastrophic loss of life and human suffering. But Russia remains silent, and that seems like the calm before the storm!

How will war impact technology?

Wars generally require a lot of resources, right from the people to the fancy rifles and revolvers. With the soldiers out, the civilians are forced to work hard so that the country can remain stable enough to feed and treat the people. The army is no longer the same as we saw in the history book. The militants are supplied with abundant resources like modern guns, riffles and drones. But the real question is, will war damage the country’s technological development? Damage to life and resources is inevitable in a war, but do you know that a country’s technology grows trifold to meet the war requirements?

Impact of war on the world of technology

This crisis will definitely leave a black mark on world technology because Ukraine supplies 90% of the US semiconductor-grade silicon, a material that is very commonly used in chip manufacturing. The chips form the basic building block of any electronic device, and it is essential to run the computer software.

Only because of the existence of chips were we able to witness the growth of virtual reality, artificial intelligence and IOT. They are also important for machine learning technology and deep learning. Moreover, chips enable the development of 5G technologies, thus allowing new growth for modern technology.

The crisis has also massively hit the stocks of technology companies that majorly aim to sell the microchips as many people have already felt the war rising. There is also a sudden shortage of chips, and the world is working to restore normalcy in electronic chip production.

The chemical palladium that is mainly used in sensors and other memory devices is sourced from Russia, and it accounts for almost 35% of the total supply. Also, the waste gas that is a byproduct of the steel factories in Russia is purified in Ukraine, and it is supplied worldwide for semiconductor fabrication. With both the major production countries involved in a war, the supplies will go down, and the experts have already suggested all the countries to expand their resources.

Many have also suggested being self-reliant as the tension seems to rise. When the production is less, the cost will be higher, and this will negatively affect the market. Many popular electronics companies like Samsung, Intel and TSMC said they are looking for other alternatives for the gas (Freon) and the chips.

After the same issue that occurred in 2014, many countries have invested in developing their own semiconductors, and electronic chips as Russia cannot always be relied on. Malaysia was raised as one of the important chip production countries by currently accounting for 13% of the global chip assembly testing and packing.

How does the conflict affect the IT industry?

There are many Russian technology companies that generate revenue by having a significant impact on the global markets. With the war ahead, many countries might cut ties with Russia and hence it will greatly impact the software companies headed and located in Russia. UK based company Kaspersky Lab has its origin and headquarters in Russia. A popular open source web proxy server company called NGINX Inc, located in Russia will leave a huge impact on global IT because these generate high volume internet services. So these companies might face a heavy loss because of the conflict.

How will it affect India’s IT industry?

IT companies located in the United Kingdom and other parts of Europe will be directly affected by the conflict. Popular companies like Tata Elxsi, TCS, Tech Mahindra and First source will be affected to a greater extent as they generate the majority of their revenues from the European market. The stock market of these will also go down owing to the conflict. The percentage revenue generated by TCS is around 37% and Tata Elxsi almost generates 67% of its total revenue from the European market, which will be affected by the conflict.

To wrap up

The Russian-Ukraine conflict has sent alarming signs to all other countries in the world as everyone senses war. War will leave permanent damage on the people as they will lose their lives, livelihood, properties, and the country will face a downfall for sure. Due to the crisis, many countries have called back their citizens from Ukraine to ensure the safety of their lives. But do you know that the situation for India has escalated quickly as the Indian aeroplane- Air India has been sent back to India by the Russian forces?

This war will have a disturbing effect on technology. Even though Russia and Ukraine might be technically prepared for war, the amount of impact it leaves on world technology is higher as the two countries account for major semiconductor raw material production like Freon gas and electronic chips. Many countries have felt the tension between them and started taking steps to diversify their semiconductor sources, but that’s still an issue as Russia accounts for 35% of the chips produced. Let’s just hope the situation gets resolved quickly without any losses, and hopefully, both these countries will sign a peace treaty to avoid the war.

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