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Since the outbreak of the Russia-Ukraine conflict, Russia has been sanctioned by many countries and regions, resulting in restrictions on the import of various semiconductor chips and equipment. This has also forced Russia to increase its investment in self-developed and locally manufactured chips, but it still faces bottlenecks in many aspects such as equipment and materials. However, according to foreign media "The Insider", Russia can still import silicon wafers (semiconductor silicon wafers) and other products from Taiwan, China through some channels. These are the raw materials necessary for chip manufacturing.

Chip manufacturing capabilities based on military needs

Since the outbreak of the Russian-Ukrainian conflict in February 2022, the United States, the European Union, Japan, Singapore, South Korea, Taiwan, China and other places have successively introduced export controls on Russian semiconductors, hoping to reduce Russia's military combat power by blocking the supply of semiconductors. Although Russia lacks modern technology to produce high-performance, commercially viable microchips, this does not mean that local manufacturers do not know how to produce semiconductor cores. Old-fashioned chip production technology was developed as early as the Soviet era.

For example, according to Denis Shamiryan, a lithography expert, the Russian company Mikron has mastered 180nm technology in mass production and 90nm technology in single-piece production. For the 90nm process, Mikron uses STMicroelectronics lithography equipment. Mikron's civilian products are limited to bank card and passport chips, and its annual production reaches 4 billion microchips.

As Shamiryan recalls, Russia also planned to produce chips at Angstrem-T in Zelenograd, Moscow region, using 130nm and 90nm technologies. In the late 2000s, Angstrem-T bought a complete ASML production line from AMD's Fab36 plant in Dresden. However, these plans never came to fruition, as Angstrem-T was declared bankrupt in 2019. However, another Zelenograd-based entity called Angstrem (without the T) produces a range of microchips.

Shamiryan also pointed out that the Crocus NanoElectronics factory under the Russian Rusnano Group had successfully established a 65nm process, mainly for the production of MRAM memory, but it could only complete half of the production cycle by itself and still had to rely on foreign supply. However, the factory was later forced to close due to sanctions.

Russia's existing microchip production facilities mainly serve military needs. For example, Russian chipmaker Epiel operates mainly in Zelenograd near Moscow and positions itself as a leader in the epitaxial growth (epi) process of chip manufacturing in Russia.

According to Epiel's latest public financial statements, the company's revenue in 2020 was close to $7 million. Epiel mainly supplies wafers with diameters of 100mm, 150mm and 200mm, although the most advanced modern technology currently uses 300nm wafers. During the year, Epiel received a government contract of several hundred thousand dollars from the Russian Ministry of Industry and Trade and supplied processed wafers to the joint venture NZPP Vostok ("Novosibirsk Semiconductor Device Plant"), which produces ready-made chips for end manufacturers.

According to the latest public procurement data, NZPP Vostok actively cooperates with the Rosatom entity KaVolodin Instrument Manufacturing Plant (Federal State Unitary Enterprise), which specializes in the production of nuclear weapons. The NZPP Vostok plant still produces 64 K bit memory chips, and at least until recently, it also sold chips worth millions of rubles to military enterprises such as Luck Design Bureau in Rybinsk, which mainly develop military equipment, including drones.

Another Epiel customer is the Institute of Electronic Equipment in Voronezh, which supplies the Fiolent military plant in occupied Crimea, Sozvezdie Concern (which makes electronic warfare and communications and control equipment for the armed forces), and Rosatom’s Volodin Instrument Manufacturing Plant.

Available records also indicate cooperation between Epiel and the former electronics plant Pulsar, which manufactured microwave equipment, transistors and microchips for the military. Epiel also fulfilled contracts for the NL Dukhov All-Russian Research Institute of Automation, which developed nuclear warheads. Epiel's address matches that of Sitronics Smart Technologies, which is said to belong to the Mikron Group. In addition, Epiel shares office premises with Mikron and the Russian Institute of Molecular Electronics. Therefore, it is reasonable to assume that Epiel belongs to the same group of companies.

Specific applications of Russian-made microchips in weapons include the 1890VM6Ya processor and its variants in the fighter jet Baguette flight control computer.

Back in 2011, an article on the popular IT portal Habr reported that chips manufactured by Milandr on 180nm technology equipment were used in Russian fighter jets and air defense systems.

The process of domestic chip manufacturing in Russia seems to be as follows: First, Epiel performs epitaxial growth on imported wafers. Then, companies such as Mikron, NZPP Vostok, Pulsar or the Institute of Electronic Equipment use these semiconductor products to manufacture ready-to-use microchips. According to industry experts, the process may include cutting the wafers into individual cores, connecting the pins and "packaging" them.

Although most of these chips are outdated relative to modern chips, Russian weapons manufacturers choose domestic chips over more technologically advanced chips, partly for security reasons and partly due to supply issues caused by the manufacturing process. In addition, since these chips are mainly used in large and heavy weapons, the miniaturization advantages provided by the most advanced electronics are basically irrelevant.

Russia currently has five old ASML lithography machines

For Russia, independent chip manufacturing is inseparable from key semiconductor equipment, especially lithography machines. Currently, the world's major suppliers of 193nm ("deep ultraviolet") DUV lithography machines are only ASML, Nikon and Canon, while only ASML can manufacture 13.5nm ("extreme ultraviolet", close to the X-ray range) EUV lithography machines.

An ASML spokesperson confirmed to The Insider that ASML has never sold a large amount of equipment to Russia. Since 2014, only $50 million worth of ASML-branded lithography machines have been imported into Russia. Although $50 million seems like a lot, it can't even buy one EUV lithography machine.

ASML claims that Russia has only imported parts for dismantled old equipment from third countries. This assessment was largely confirmed by the Ukrainian publication Pravda. According to reports, as of 2022, Russia has five ASML lithography machines (all of the PAS 5000 series) in operation with a wavelength range of 365 to 193 nanometers, located at the Russian Scientific Research Institute of System Analysis, Mapper, Zelenograd Nanotechnology Center and Mikron.

After the full-scale outbreak of the Russian-Ukrainian war, TSMC has stopped manufacturing chips for Russia. For this reason, Russia has to rely on existing imported semiconductor equipment to manufacture its own chips in the country. Although Russia currently has five ASML equipment in operation, these equipment are very outdated and even have a history of 15-20 years.

In response, ASML insisted that it does not provide maintenance services for Russia's lithography equipment, but many related parts are still circulating in the secondary market that the manufacturer cannot control.

It is important to note that, in addition to a few Western lithography machines imported before the sanctions, Russian manufacturers also have access to lithography machines from the Planar plant in Minsk. These lithography machines operate at a wavelength of 350nm with a minimum feature size of 500nm, representing a technology that emerged in 1995 but was obsolete by 1999.

Semiconductor Raw Materials Supply

There is another problem for Russia to manufacture its own chips, that is, it lacks the necessary semiconductor material suppliers, such as semiconductor silicon wafers and photomasks, which must be imported. Although it has encountered some obstacles before, Russia can still purchase these products through some channels.

According to internal Russian Customs data, Russia imported a total of $150.5 million worth of semiconductor-related products (customs code 848620) for the production of microchips and printed circuit boards in 2023. The list of buyers includes civilian entities (such as Sitronics Smart Technologies, which produces smart cards and chips, and Hevel, which produces solar panels), dealers of various equipment (including sanctioned goods), and organizations that purchase small quantities of equipment for peripheral non-core projects (such as IT company Craftech).

While Russia’s largest importer of silicon wafers is OOO Hevel, which imported nearly $7 million worth of wafers from China in 2023, these are primarily used in solar panels. Epiel is one of the largest importers of semiconductor wafers used in chip manufacturing, importing $2.2 million worth of semiconductor wafers in 2023. Many of the company’s end users are military companies, and from the early 2010s until the full-scale invasion of Ukraine, most of its suppliers were Asian and American entities.

However, after the outbreak of the Russian-Ukrainian conflict, Epiel had to completely change its supplier base and purchase semiconductor silicon wafers from several major exporters in Southeast Asia. According to the list compiled by The Insider, the Taiwanese company Pai Haung Technology also exported a lot of semiconductor silicon wafers to it, and it only has business dealings with a few Russian and Belarusian entities to whom it can directly ship semiconductor silicon wafers from Taiwan.

Since the outbreak of the Russian-Ukrainian war, Pai Haung has sold $4 million worth of semiconductor silicon wafers to Russia and Belarus under his brand, but the brand has no online visibility. The Insider believes that many customs documents point to another company, Wafer Works of Taiwan, as the manufacturer because this company was also a supplier to Epiel before the Russian-Ukrainian conflict broke out.

The Insider believes that the little-known Pai Haung does not actually produce semiconductor silicon wafers, so his role in the supply chain is limited to that of a resale middleman.

Kharon, a data company founded by a former U.S. Treasury official, found that Pai Haung was once listed as an affiliated entity on the website of the U.S. DMS Electronic Components Group, but now this information has disappeared from the website.

In an interview with Taiwanese media, Pai Haung CEO Bao Yongjian said the company would strictly abide by Taiwanese laws and would not do business with sanctioned companies.

Epiel, currently based in Zelengrad, Russia, is indeed not included in the US, Taiwan or other sanctions lists, despite being an integral part of the manufacturing process for products that are ultimately used by the Russian military industry.

However, another of Pai Haung’s clients, AO VZPP Mikron (Voronezh Semiconductor Equipment Joint Stock Company Mikron), is under sanctions. In 2020, Mikron received a series of government contracts to develop radiation-hardened Zener diodes up to 1,200 volts, which are more likely to be used in the military than in civilian applications.

Epiel's fourth-largest supplier is the Chinese branch of Japan's D&X Co., Ltd. At The Insider's request, Japan's Ministry of Economy, Trade and Industry sent a list of banned items, which shows that Japanese companies are not allowed to export silicon wafers (code 381800) to Russia.

Another Epiel supplier, D&X, has not yet responded to The Insider's inquiry. And management said it was unaware that D&X shipped to Russia.

Related article: "The current status of Russia's semiconductor supply chain under joint sanctions from Europe and the United States"

Editor: Core Intelligence - Rurouni Ken