TECH

Russia is buying defective chips from China

Local companies are often supplied by suppliers with defective parts, because Russians cannot buy from anyone else.

Thanks to sanctions brought on by the Russian-Ukrainian war, acquiring microchips is a growing problem for Moscow. One solution is to build its own semiconductor industry, but, on the one hand, Russia cannot keep up with the technological development in the area and, on the other hand, it lacks the knowledge necessary to control the quality of chips. The Russian daily Kommersant reports that in the case of components, the failure rate is increasing. This is partly due to Russian companies supplying components, such as chips, through dubious channels. Up to 40% of the chips purchased on the bypass can be faulty or end up in junk mail in no time.

Because of the war against Ukraine, most chip makers are now discontinuing trade relations with Russian companies. Manufacturers include giants such as Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC). While there is no disruption to trade relations between Russia and China, the Chinese semiconductor industry is also suffering from US sanctions and is suffering huge losses as a result of the trade restrictions. The situation is exacerbated by the fact that Russian plans for the construction and start of production of Russian chips have not yet been carried out.

While Russia has said it wants to invest 3.2 trillion rubles in its own semiconductor industry by 2030, it is unlikely to face the challenges. Russian industry wants to start production with 90 nanometer technology this year, which corresponds to the technological level of 2003. Russia wants to produce 28 nanometer chips by 2030, which is more than a decade behind the current state of the art 3 nanometers.

The Russians do not have the tools and expertise to check the quality of chips...All this means that Russian companies have only questionable sources for procuring semiconductors. Currently, these goods mainly arrive in Russia through intermediaries or commodity exchanges. However, quality control of ordered products is not a priority, just as companies do not have much ability to complain if, for example, they receive defective products. Errors are also caused when manufacturers do not use the exact chips they designed their products with. For this reason, they often buy bad parts from the start, the proportion of which has increased from 2 to 40 percent in recent months.

Ivan Pokrovsky, head of the Center for Modern Electronics in Moscow, confirmed that many Russian companies lack the knowledge and experience to carry out quality control. However, the issues only affect individual market participants and are not present across the entire industry. Russian smartphone and computer maker F+ Tech is having trouble finding working LCD monitors. According to Yevgeny Krivosev, one of the company's managers, the quality of the parts delivered today can only be determined based on their appearance. F+ Tech manufactures smartphones, printers, switches and servers.

The relevant Ministry of Industry and Commerce in Moscow said it had no information about the chip crisis. However, observers assume that defective parts will also be reflected in rising prices. Nyikolaj Komlev, executive director of the Association of Computer and Information Technology Companies, added that manufacturers were able to process lower quality parts, but the increased error rate results in higher costs. The executive expects handset prices to rise by as much as 40% to compensate for damage caused by defective parts.

mundophone