Linde Electronics and Specialty Gases has made another investment in its vertically integrated neon supply chain, with the installation of a production facility at the group’s large ASU in La Porte, Texas.
The new production unit is part of a $250m investment in Linde’s La Porte site, and will add no less than 40 million litres of neon annually to these capabilities.
Linde is also upgrading purification and distribution capabilities at several locations around the world, as the company seeks to assure a long-term and secure supply of neon for its customers globally.
Customers in the semiconductor lithography and laser vision correction markets in particular will be supported by the expanded supply chain.
“This is an important part of our strategy to increase our overall neon supply and meet the growing needs of our customers,” said Matt Adams, Vice-President, Electronics and Premium Products. “It is yet another example of Linde’s commitment to provide a robust supply chain of consistent quality products to our global customers.”
The timing of Linde’s investment in neon supply is particularly pertinent, given that the gas has been in unusually severe shortage in 2015/16.
A by-product of very large oxygen plants, neon has historically been in over-supply since its days as a strategic product for both the US and former Soviet Union (USSR) in the production of their respective high-powered laser weaponry.
This production, coupled with the fall of the USSR, effectively created a significant stockpile of neon – largely in Eastern Europe – that continued right the way through to 2013. As gasworld explored in its September 2015 Hot Topic, this over-supply began to tighten in 2014 as many existing oxygen plants in Eastern Europe were either shutdown or replaced by new units without neon capability.
Such decline in production created a sizeable imbalance in the market; in 2015 production totalled around 400 million litres per year, with demand at around 475 million litres.
A handful of mothballed plants could address this imbalance if started up again, gasworld understands, while it is thought that discussions have taken place at all major suppliers to add capacity from 2016-2018. With today’s announcement, Linde has clearly taken a decisive step forward in its own discussions and furthers its leadership in the global neon market.
The company is the only neon provider with end-to-end supply chain and quality control capabilities in-house – from plant design and production to multiple-site purification and blending. “Linde already has a deep understanding of the latest technologies, OEM activity and customer requirements,” Adams added.
“We have decades of experience in refining our global production, analytics, distribution and local stocking/service network. We believe this new investment will allow Linde to further enhance this leadership position well into the future.”