Russia needs access to chips to power missiles and other munitions for its invasion of Ukraine but is reportedly facing a severe technology shortage often due to trade sanctions.
Officials in Ukraine are urging the US and other allies to help thwart access to chips that Russia vitally needs. Politico gained access to a shopping list of semiconductors and components such as transformers and connections from an unnamed source indicating the items Russia most wants and that Ukraine hopes Russia can’t access.
That list was seen by reporters at Politico who posted the list online Monday.
It includes 25 items that Russia critically needs made by well known US companies such as Intel, Marvell, Micron, Broadcom and Texas Instruments. The most expensive item is an FPGA made by Intel that sells for nearly $1,100 apiece.
The story quotes James Byrne, director of source intelligence and analysis at RUSI saying Russia could be running low on its stock of chips made by countries in the West even after buying up stock and essential equipment for years. “We obviously think they are scrambling to secure supplies,” he told Politico.
While US trade sanctions on sales of some chips to China and Russia have gone on for years, there might be a stepped-up level of activity. Recently, Nvidia and AMD reported being told by the US to curtail sales of some AI and ML accelerator chips to Russia and China, based on concerns China could resell those chips to Russia. Both companies had curtailed sales to Russia at the outbreak of the Ukraine invasion. Investors are worried the US might expand restrictions to more chips, analysts said.
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But there is also the concern that once chips have been sold, despite trade sanctions, there is little oversight for where they end up. In a sense, they are no different than armaments purchased by the Soviet Union during the Cold War, where a complex and large network of suppliers was establishes to circumvent sanctions.
“It’s a huge challenge to monitor the illegal proliferation channels,” one expert, Diederik Cops, an arms exports researcher for the Flemish Peace Institute told Politico.
"There should be an active surveillance program to supplement a targeted sanctioning program to limit Russia's ability to produce military systems," Leonard Lee, managing director of neXt Curve, told Fierce Electronics. "A sanctioning program should be holistic, looking at each phase of the production of weapon systems with a priority places on strategic platforms such as hypersonic weapons, smart artillery and surveillance drones that have been used in target spotting by Russian and Ukrainian forces."
Russia has taken shipments of military drones from Iran, which will be helpful to Western intelligence groups in adjusting their actions against Russia, he said.
Trade restrictions on top of a continued supply chain concern
Trade restrictions on chipmakers and the war in Ukraine only exacerbate a tough chip supply chain problem that started with the pandemic and led to shortages across many commercial products, including pickup trucks and multiple consumer electronics categories.
For example, when Russia’s invasion of Ukraine occurred in February, analysts worried about a possible problem with continued access to neon from Ukraine used to make deep ultraviolet light used in the photolithographic process for patterns on semiconductors.
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Plenty of chip fabs already had neon when the war broke out, but as the war continues, “it could be very problematic [for access to neon] in 2023,” said Jennifer Strawn, head of sourcing for the Americas and EMEA for Rand Technology, a longtime global component and supply chain solutions company.
Customers have had to create new supply chain strategies as they have discovered supply chain lead time problems, she said in an interview with Fierce Electronics.
A normal lead time to order a chip and have to delivered used to take eight to 12 weeks prior to the pandemic, which has now stretched to 52 weeks, Strawn said.
Customers can expect nothing short of 52 weeks lead time for a few years, she said.