Russian self-reliance in microelectronics remains a distant dream

On 20 April, Rostec CEO Sergey Chemezov announced that his companies are accelerating the development of domestic microelectronics ‘as foreign deliveries can be stopped at any time’.

He added: ‘The trend of recent years shows that import of the electronic components, products and software can be terminated at any time. That is why we are speeding up the development of our own hardware components, technologies and products.’

Concerns over security of supply are not new. The authorities in Moscow recognised this vulnerability in high-technology defence programmes several years ago, and they have been working to improve the situation since then.

In September 2016, for instance, the then Deputy Prime Minister Dmitry Rogozin named the development of a domestic microelectronics industry as a key priority for the military.

And in March 2018, President Vladimir Putin proclaimed a microelectronics development plan. ‘Domestic development and serial production of microelectronic products are a guarantee of [the] technological and technical independence of Russia’, he emphasised.

However, despite all the announcements and steps taken by the government to date, the industry is still at the stage of policymaking and strategic planning.

It seems that the measures taken did not bring the desired results. ‘Government intends to tighten measures of control in import substitution of the microelectronics in order to prevent procurement of the foreign technological products under Russian brands,’ said Yury Borisov, the Russian Deputy Prime Minister for Defence and Space Industry, last September during the Microelectronics-2020 forum.

While Borisov noted that Russia is no longer dependent on microelectronics ’produced in NATO countries and Ukraine’, he acknowledged that Russian companies are often trying to offer solutions based on European or Chinese components.

Earlier in 2020, Deputy Prime Minister Dmitry Chernyshenko highlighted that domestically produced microelectronics only account for about 10% of the Russian market.

In 2021, rising international tensions between Russia and the West exacerbated the problem. While other critical requirements for the military and Russian industry are covered (at least partly), the position of the microelectronics industry remains shaky. Firstly, the evident need to ensure technological independence requires massive investment over an extended period of time. The ability to guarantee stable funding in the post-COVID Russian economy is possible but debatable.

Secondly, a worst-case scenario with severe supply chain disruption might lead to a significant slowdown in essential military R&D projects in areas such as robotics, directed energy, precision-guided munitions, C2 and situational awareness systems.

These factors, in turn, might lead to skyrocketing costs, delays and eroded military capabilities, not to mention a negative effect on Russian arms exports.