Ukraine's two leading suppliers of neon, which produce about half the world's supply of the key ingredient for making chips, have halted their operations as Moscow has sharpened its attack on the country, threatening to raise prices and aggravate the semiconductor shortage.

More than 45-54 per cent of the world's semiconductor grade neon, critical for the lasers used to make chips, comes from Ingas and Cryoin.

Global neon consumption for chip production reached about 540 metric tons last year. However, both firms have shuttered their operations as Russian troops escalated their attacks on cities throughout Ukraine, killing civilians and destroying key infrastructure.

Worldwide output of chips, already in short supply after the coronavirus pandemic drove up demand for mobile phones, laptops and later cars, forcing some firms to scale back production.

However, chip companies have said that they have enough neon in place to maintain production while other suppliers are found.