The chips are down: Putin scrambles for high-tech parts as his arsenal goes up in smoke
Microchips appear to be the endgame for Vladimir Putin. Six months into its invasion of Ukraine, Russia is suffering from a severe technological deficit caused by sanctions.
Moscow's soldiers are increasingly relying on ancient stocks of primitive Soviet-era munitions after firing (or losing in combat) far more missiles than they anticipated, while Western-armed Ukrainian forces battle to turn the tide in a southern counteroffensive with pinpoint strikes on munition dumps and key infrastructure such as bridges.
Kyiv is acutely aware that the outcome of the war is likely to hinge on Russia regaining access to high-tech chips, and is working hard to ensure that it does not. Ukraine is warning the international community that the Kremlin has drawn up shopping lists of semiconductors, transformers, connectors, casings, transistors, insulators, and other components, the majority of which are made by companies in the United States, Germany, the Netherlands, the United Kingdom, Taiwan, and Japan, among others, that it needs to fuel its war effort.
POLITICO obtained a copy of one of the Russian lists, which is divided into three priority categories, from the most critical to the least critical. It even includes, down to the last kopeck, the price per item that Moscow expects to pay. While POLITICO could not independently verify the list's authenticity, two military supply chain experts confirmed it was consistent with other research findings about Russia's military equipment and needs.
On the surface, Russia shouldn't be able to obtain the most sensitive technology on the lists. With only very basic domestic technology, the Kremlin has relied on key players in the United States, the European Union, and Japan for semiconductors as suppliers in recent years, and these should now be out of reach due to sanctions. The difficulty would arise if an intermediary country, such as China, purchased technologies and then sold them to Moscow. In the most extreme cases, Russians appear to be clawing chips out of household appliances such as refrigerators.
Ukrainian Prime Minister Denys Shmyhal said the war had reached a tipping point, with the technological advantage proving decisive.
"According to our information, the Russians have already spent nearly half... of their arsenal of weapons." "He told POLITICO that.
He went on to say that Ukraine believed Russia was down to "four dozen" hypersonic missiles."
Because of the microchips in them, these have high precision and accuracy. However, due to Russian sanctions, deliveries of this high-tech microchip equipment... have ceased, and they have no way of replenishing these stocks."
Chips are on the menu.
Almost all of the top 25 items sought by Russia are microchips made by American companies Marvell, Intel, Holt, ISSI, Microchip, Micron, Broadcom, and Texas Instruments. Chips from Japanese firm Renesas, which acquired IDT in the United States; microcircuits from American firm Vicor; and connectors from AirBorn in the United States round out the list. Some of the items are readily available from online electronics retailers, while others have been out of stock for months due to a global microchip shortage.
The cheapest item on the top priority list, the Marvell 88E1322-AO-BAM2I000 gigabit ethernet transceiver, can apparently be obtained for 430.83 rubles, or around €7. According to the list, the most expensive item is an Intel 10M04DCF256I7G field programmable gate array, which costs 66,815.77 rubles or €1,107 each (it would have cost less than €20 before the chips shortage).
Companies on the medium priority list include Germany's Harting and the Netherlands' Nexperia (which was acquired by Chinese tech firm Wingtech in 2019). According to the list, the Russians are looking for a variety of Harting casings and connectors, including the 09 03 000 6201 and 6104, as well as Nexperia/74LVC1G14GV,125 NXP's inverters and 74LVC244APW,112 octal buffer/line drivers.
According to James Byrne, director of open source intelligence and analysis at leading defence and security think tank RUSI, Russia has likely been stockpiling Western microchips and other essential equipment for years but may now be running low.
According to Byrne, Russia's military procurement programme is "extensive, well-funded, and they have a massive military and industrial base producing stuff." "However, they have depleted so much of it in Ukraine that they require a large volume of new supplies. And the sanctions will make it even more difficult for them... As a result, they'll have to prioritise critical items, which is why we're seeing these documents. We believe they are scrambling to secure supplies."
Breaks in the blockade
Western countries have tightened sanctions on Russia since its latest invasion of Ukraine in February, increasingly targeting its supply chains of microchips to reduce its military capabilities. The new sanctions follow years of stricter controls on chip sales — which frequently fall under "dual-use goods" because they are used in both military and civilian applications — under international agreements such as the Wassenaar Arrangement and recent EU legislation.
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