On February 25, BIS published details of new restrictions on the export of technological products for Russian industries.
The corresponding document “in response to Russia’s further invasion of Ukraine” will come into force on March 3 this year. American companies will have to obtain licenses from the US authorities to export BIS-controlled products to Russia, including electronics, computers, avionics, aerospace components, etc. It is assumed that the US will only approve exports in exceptional cases.
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The presumption of refusal will not apply only to supplies necessary to ensure the safety of civil flights, maritime security, humanitarian needs, Russian-American cooperation in space exploration, and the work of Russian subsidiaries of Western corporations.
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At the same time, for “consumer communication devices” – personal computers, modems, mobile phones and digital cameras – the US Department of Commerce made an exception, these devices can be freely supplied to Russia for use by individuals other than the Russian authorities and a whole list of officials, including the president, prime minister, vice-premiers, federal ministers, State Duma deputies and members of the Federation Council, editors-in-chief and deputy chief editors of state media. The ban will apply not only to the supply of US-made high-tech goods, but to all goods that use American technology.
How will the ban affect the market?
Intel and AMD are the largest chip manufacturers in the world. Among Russian companies, their products are used by manufacturers of computers, monoblocks, data storage systems and other electronic equipment. In addition, Intel and AMD processors are used in the supercomputers of Sberbank, Moscow State University, Yandex and MTS.
According to one of RBC’s interlocutors in the IT market, the new rules of the game are not yet fully understood. “Perhaps for the supply of computers, servers, software, telecommunications equipment, etc. Russian companies will need to obtain an export license. The process of obtaining it takes from one to six months, but there are no guarantees for a positive result. And if for each order it will be necessary to obtain an export license from BIS, this will be a very difficult story for market players, ”said RBC’s interlocutor.
A RBC source close to one of the Russian manufacturers says that the restrictions do not apply to the consumer segment of end devices. “However, everything related to the industrial segment is banned, including the import of production equipment and components, which will definitely have a negative impact on domestic production,” RBC’s interlocutor said.
However, another market participant says that despite the fact that some foreign computer manufacturers say that the ban should not apply to the supply of assembled computers, they may later reconsider their position, because “there are sanctioned components inside these computers that are not subject to re-export.” At the same time, he noted that in recent years, thanks to the support of the Ministry of Industry and Trade and the Ministry of Digital Development, the development of Russian microelectronics has “quite seriously pulled up” and the task of creating an alternative to Intel and AMD processors is “quite real.”
According to Maxim Koposov, director of the Promobit company (manufacturer of BITBLAZE servers and storage systems based on Russian Elbrus processors), how exactly the restrictions will work and where the border between consumer communication devices and computing equipment, such as servers and video accelerators, will be drawn practice.
“Russian manufacturers and customers will look for ways to work in the new conditions. Where possible – through an increase in the use of Russian or non-American components, or through the use of exceptions left by the US Department of Commerce, ”Koposov said.
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At the same time, one of RBC’s interlocutors indicated that Russian companies may try to buy foreign processors through some alternative channels, for example, from Chinese companies. “Here everything will depend on the direction of the business: if the main customer is a company from the US and Europe, then they will be very reluctant to cooperate with Russia, because this may disrupt their core business. If the main business is the domestic market, then intergovernmental agreements can help Russian manufacturers, ”says a RBC source.
The use of Russian processors, he said, may be complicated if the Taiwanese factory TSMC, which produces Russian processors Elbrus, Baikal, Skif, and others, refuses to work with them. In this case, their production may stop, since it is “very difficult” to transfer it to another factory, the source explained.
On Friday, February 25, Kommersant, citing a government source, wrote that Russian microelectronics developers had received a notification from TSMC that the US authorities were demanding that the company cease cooperation with Russian contractors. Reuters later reported that TSMC promised to fully comply with the new export control rules. In response to a question from RBC about whether this means that TSMC will not supply products to Russian companies, a representative of the vendor said that they “do not comment on speculation and market rumors.”
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The general director of Norsi-Trans (produces equipment on Russian processors) Sergey Ovchinnikov says that so far there have been no official statements from TSMC that they are blocking the production of Russian processors. He also said that if such a ban appears, there are “other Chinese factories.” In his opinion, the refusal to supply products from Intel and AMD will lead to a serious shortage of servers, as the production volumes of processors by domestic companies “will not be able to cover the needs of the market.”
At the end of January, assessing the risks of a ban on the supply of high-tech products using American technologies to Russia, RBC’s interlocutor in the computer market said that any electronic product “uses solutions from the United States.” Among the consequences of such sanctions, experts called the complication of the supply of components and, as a result, an increase in their cost. According to one of the market participants, prices for all equipment can grow by “at least 30%.”
Representatives of Aquarius, GS Group, MCST (developer of Elbrus processors), Baikal Electronics (develops processors of the same name), IVA Technologies and Yandex declined to comment. RBC sent a request to SPC Elvis, STC Module, KNS Group (produces servers under the Yadro brand), MTS and Sberbank, as well as Huawei, Honor, HP and several other foreign electronics manufacturers.