Processors are out of stock

Russian microelectronics design centers have increased their annual revenue by several times due to the rush demand for domestic components, they say in specialized associations and confirm market participants. But they cannot allocate funds for the production of new batches at foreign factories due to sanctions. In such a situation, developers can only design electronics that can potentially be produced in Russia, experts believe. But the demand for such components can only be provided by the state.

At the end of 2022, Russian microelectronics design centers doubled their revenue on average, Ivan Pokrovsky, executive director of the Association of Electronics Developers and Manufacturers (ARPE), told Kommersant, referring to a survey of association members: components, including Russian processors, design centers have sold out of stock.”

Two Kommersant sources close to Russian design centers confirm the estimates. For example, “Milandr”, which had a large inventory of its own components, increased revenue several times, says one of them. According to the interlocutor of “Kommersant” in one of the Russian design centers, the revenue “significantly increased” and the STC “Module”. Another source close to one of the Russian design centers confirms that in 2022, consumers of components “purchased electronics that remained in warehouses for future use in large volumes.”

Baikal Electronics really increased its revenue year-on-year due to the sale of inventory, says Andrey Evdokimov, CEO of the company, without disclosing the figures. However, he emphasizes that the figures are “several times less than the forecasts that were before February 24, 2022 (that is, before the start of hostilities in Ukraine.— “b”)”. Modul declined to comment, Milandra did not respond to a request.

In 2022, all major Russian microelectronics design centers were among the first to be included in the US sanctions list. Baikal Electronics (a line of Baikal processors), STC Modul (Neuro-B processors), MCST (Elbrus processors) and SPC Elvis (Skif mobile processors) were subject to export restrictions. Because of the sanctions, foreign manufacturers of microelectronics (primarily Taiwanese TSMC) refused not only to conclude contracts for the production of new batches of processors, but also to fulfill obligations under already concluded contracts. Because of this, a number of companies have lost even processors produced but not delivered to Russia (see Kommersant dated June 16, 2022).

Now Russian design centers, which have lost access to foreign semiconductor factories and sold stocks, will need to switch to the development of components, the production of which can be mastered by Russian factories with technological lines of 180 nm or more, says the general director of Norsi-Trans (produces servers and storage systems) Sergey Ovchinnikov: “This will allow not to lose the team of engineers. In addition, we will master the production of components that will be in demand anyway.” Let them “be inferior”, but the demand will appear sooner or later, the top manager adds.

Investments in the development of components for topologies of 180 nm and more make sense only under a guaranteed order, Anton Yakimov, Deputy General Director of T1 Group for Technological Development, believes: advanced, then definitely more modern topologies. For businesses, Mr. Yakimov says, in a situation where sanctions complicate, but do not completely block, the supply of modern electronics to Russia, it is easier to arrange supplies through parallel imports.

Nikita Korolev