The supply chain for chips, already extraordinarily fraught with logistical and geopolitical impediments, is about to face another. According to a report from the risk analysis team at Resilinc, an AI-based supply chain data monitoring firm, the shutdown of a coolant plant in Belgium will remove the vast bulk of two specialized coolants—essential to the semiconductor manufacturing industry—from the market. The impacts, they say, remain to be seen.

3M’s plant in Zwijndrecht, Belgium, Resilinc says, is responsible for 80 percent of the world’s production of the specialized coolants “3M Fluorinert” and “3M Novec.” These coolants are used in the etching process—a process that the report says is impossible without coolant.

In 2020, Belgium directed the plant to reduce and remediate the per- and polyfluoroalkyl substances (PFAS, popularly known as “forever chemicals”) produced as byproducts of the coolant manufacturing process. 3M reduced production, but appealed the substance of the regulations; in March, it lost that case in front of the Belgian high court, which on March 8, 2022, ordered 3M to shut the plant down until sufficient measures were implemented to comply with the regulations. To that end, 3M has pledged a $167 million cleanup effort.

In the interim, though, the plant is not operational, leaving one U.S. plant (responsible for 10 percent of the global production of these coolants) to fill the gap—a task well outside the capacity of that plant (Belgium-based Solvay supplies the remaining 10 percent share from an Italian plant). Shortly after the plant was ordered to be shut down, 3M told chipmaking customers including Intel, Samsung, SK Hynix and TSMC that they would be facing shortages.

Resilinc estimates that the chipmaking companies likely have between one and three months of supply remaining depending on their stockpiled inventory. Some of these companies have already declared how they intend to cope with the shortages: Samsung and SK Hynix are working to diversify their supply; Unicom has said that it has insulated itself from the shortage through multiple supply sources and guarantees; and TSMC and United Power have said that there are no current impacts. Still, Resilinc says, while the short-term impacts may be limited, suppliers will need to search for alternatives (particularly if they are 3M-dependent) and future pricing may be affected.

Resilinc, citing reporting from the Taipei Times, also says that even before this impending shortage, coolant prices were increasing just due to demand. And it’s unlikely that the pressure will abate any time soon: Belgium, the researchers say, is pressing for an EU-level ban on PFAS.

To learn more, read the report from Resilinc, which is available here.

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