Welcome to another in the continuing “Why Russia’s X Is Screwed” series! It seems that Russia’s technological infrastructure is even more screwed than their airline industry.
Some takeaways:
If the sanctions are maintained, they will “almost certainly cause the collapse of Russia’s economy on short notice, and will set the country’s technological progress back by decades.”
Russian state entities and miltech was put in “a complete black box.”
“Even non-military end users were still barred from key technologies, such as semiconductors, telecommunication, encryption security, lasers, sensors, navigation, avionics and maritime technologies. Other countries from the EU to Japan and South Korea all imposed similar sanctions of their own.”
Even many private companies that lobbied for special carve-outs from sanctions changed their mind and suspended all business with Russia.
Just about every car and truck manufacturer. “95% of car parts in Russia are imported.”
Apple, Samsung, Dell, HP, Oracle, SAP, and Microsoft have all halted sales.
“Overnight, many industries in Russia are just gone.”
Every high tech company in Russia relies heavily on foreign inputs and expertise.
He talks about the embargo on semiconductors (more on this in the video below), but says that it applies even to chips made with embargoed tech. So if SMIC used an Applied Materials PVD machine, those chips couldn’t legally be shipped to Russia. I am skeptical this is actually the case (and it would be very hard to enforce on Chinese companies).
“The Russian economy did not prepare itself for sanctions anywhere near this severe.”
Two-thirds of Russia’s foreign reserves of $643 billion were parked abroad, which was all frozen when sanctions came down.
“Every part of the Russian economy has just received major damage, and there’s no way they can pivot everything all at once.”
“They’re simply not survivable in the long-term.”
Russia has increased interest rates to 20% to keep the ruble from collapsing further.
Even China has slowed-down or halted loans to Russian entities.
Russia is going to run out of cash “in a few weeks to a few months.”
Russia is heavily reliant on foreign tech, but for most tech companies, Russia is a minor market.
Expect a brain drain as wealthy and skilled Russians lose their jobs, then move abroad.
Many national industries simply cannot exist without foreign inputs. Substitutes would take years, if not decades.
Conclusion:
If these sanctions continue, there will be no economy left to support the Russian military. Russian technological progress will be thrown back by years, if not decades, across the board. And in just a couple of weeks, or maybe months, the vultures will start circling, and they will start picking off every interesting
Russian asset, every interesting Russian employee, oil fields, anything that they can get their hands on. And they’ll start transporting that out of the country as well. I cannot believe that Putin started a war expecting any sanctions anywhere near this scale.
Now on to semiconductors:
TSMC halted all shipments to Russia, as has AMD and Intel.
The Soviet Union had a massive technology gap between it and the United States, which only got worse as time went on.
All the computing power in every computer in the Soviet Union in 1991 combined would fall two generations short of a single Cray.
“The most advanced semiconductor production facilities were in East Germany, Belarus, Ukraine, and so on.”
JSC Mikron is Russia’s largest semiconductor manufacturer. “Today it fabs RFID tickets, SIM cards, and other smart card products.” They did about $260 million in business in 2020 (including government subsidies). They bought IP from STMicroelectronics.
In 2014, Mikron announced “the successful achievement of the 65 nanometer node at a volume of 500 200mm wafers a month.” [record scratch] 500 wafer starts a month??? That’s nothing. TSMC’s top of the line fabs generally do 120,000 wafer starts a month. It’s maybe OK if you’re running weird, demanding, high profit, low-volume processes (say, Gallium-Arsenide chips for use in satellites), but not for Mikron’s main business line (RFIDs).
But all that is beside the point, since they didn’t have a stepper capable of doing 65 nanometer. “Fujitsu, Toshiba, and TSMC started shipping their commercial 65 nanometer nodes in 2005. So this means that Russia’s gap with the leading edge has grown from 9 years to 15+.”
Russia’s Angstrem offers a wafer foundry doing “130 nanometer and 90 nanometer process nodes on 200mm wafers. Their capacity is about 180,000 wafers a year.” They declared bankruptcy around 2019. They were also hit by U.S. sanctions after the Crimean invasion. Successor company NM-Tech has a pie-in-the-sky plan to do 10nm in 10 years. Don’t hold your breath.
(I notice he makes no mention of “Crocus Nano Electronics,” which supposedly runs Russia’s only 300mm wafer fab (“Established in 2011, Crocus Nano Electronics is the world’s first and only 300mm fabrication facility, located in Russia”), but when you get down into their press releases, it says “The development and production of Crocus Nano Electronics ReRAM memory chips were manufactured on 55 ULP CMOS by Shanghai Huali Microelectronics Corporation (HLMC).” So either they’re a fabless design house, or they only do the metal interconnects fabrication and nothing else in the process, which is so weird a model I can’t really wrap my head around it.)
I’m omitting the coverage of various fabless design houses, since they’re dead-in-the-water without access to decent foundry technology or foreign markets.
They can probably get stuff fabbed at China’s SMIC.
If Russia had turned into a regular country after 1991, there’s no reason they couldn’t have launched a competitive domestic tech industry. The Soviet Union had large number of frequently bloody flaws, but they didn’t stint on STIM education, and maintained very competitive space capabilities despite numerous handicaps. But instead, they turned into a corrupt oligarchy-turned-dictatorship, and all that human capital either emigrated or withered on the vine.
And now, thanks to Vlad’s Big Ukraine Adventure, they’re even more screwed than they were before.