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Russia to invest $2.5bn on developing home-grown chip making equipment

Daniel Nenni

Admin
Staff member
Country aims to remove 70 percent of foreign-made technology from manufacturing operations by 2030

Russia is reportedly planning to spend more than 240 billion rubles ($2.54 billion) on 110 R&D projects focused on developing domestic chip-making equipment and materials.

According to a Google-translated report from CNews, the Russian Ministry of Industry and Trade and the International Scientific and Technical Center of Electronic Technology (MIET) want to remove foreign-made equipment from the country’s microelectronics manufacturing operations.

Russia flag

– Getty Images

The MIET has a removal target of 70 percent by 2030 and there are reportedly 41 projects that have already been launched, with a further 26 due before the end of the year and the final 43 launching between 2025-26.

Following Russia’s invasion of Ukraine in 2022, Russian chip companies Baikal Electronics, Mikron, and MCST (Moscow Center of SPARC Technologies) were added to the UK and US government's sanctions list.

According to a report from the American Enterprise Institute (AEI) published in April 2024, Russia’s chip-making industry is still functioning, as domestic firms largely produce semiconductors for government customers, such as the military.

However, while the report described the industry as “small” and “technologically backward,” it noted that it remains reliant on Western spare parts and materials and European and Asian allies should enforce tighter controls on chip-making tools and equipment to further squeeze the industry.

In June 2024, US lawmakers introduced a bipartisan bill to bar US-based companies that have received CHIPS and Science Act funding from buying chipmaking equipment from companies owned or controlled by China, Russia, North Korea, and Iran.

Two months later, the Biden Administration banned exports of Nvidia and AMD's latest GPUs to some countries in the Middle East amidst accusations that the United Arab Emirate (UAE) had become a potential “transshipment point” used by Russia to evade sanctions and the country’s deepening ties with China.

According to the AEI report, in the first half of 2023, shipments of chips from China accounted for 88 percent of the chips acquired by Russia.

 
Russia is reportedly planning to spend more than 240 billion rubles ($2.54 billion) on 110 R&D projects focused on developing domestic chip-making equipment and materials.
The Russians sent a prototype of an UV-LED lithography machine for testing last year. It is meant to replace imported i-line lithography equipment which can make chips at 350nm process. The Russians also have produced a prototype of a KrF lithography machine recently and are in the process of developing their own ArF lithography machine.

Currently their best foundry production equipment at Mikron, that uses imported tools, uses KrF lithography and is capable of 90nm process.

According to a report from the American Enterprise Institute (AEI) published in April 2024, Russia’s chip-making industry is still functioning, as domestic firms largely produce semiconductors for government customers, such as the military.
Most of the volume is in either civilian government or state owned corporations like utilities. For example smartcard chips for credit cards, smartphones, public transportation cards, passports, or MPUs for smart meters.

The military only drives a small amount of the volume. For the most part these use legacy processes and technologies. The exception is leading edge weapons or platforms like the Su-57 fighter. But AFAIK even that only uses 90nm chips at best like the Elbrus-2SM.

However, while the report described the industry as “small” and “technologically backward,” it noted that it remains reliant on Western spare parts and materials and European and Asian allies should enforce tighter controls on chip-making tools and equipment to further squeeze the industry.
They can make 90nm chips. This is better than what German companies like X-Fab can do.

Demand for chips and chipmaking equipment for the actual Russian military is so small they can easily smuggle it if they wanted to.

According to the AEI report, in the first half of 2023, shipments of chips from China accounted for 88 percent of the chips acquired by Russia.
Most of these chips come from American companies like Analog Devices and Texas Instruments.

Most of the chip warehousing operations are in China. I bet if you order chips from those companies in the US you will likely get them from China as well.

Russia and North Korea are China's biggest semiconductor customers. This is not good for China.
Simply not true. Most of China's chip exports go to South Korea, Taiwan, Vietnam, Malaysia, India, and the Phillipines.
They then get assembled into products which get sold all over the world.
 
Currently their best foundry production equipment at Mikron, that uses imported tools, uses KrF lithography and is capable of 90nm process.

And it is likely as entirely dependent on imported consumables as any mainland fab, and which are, to everyone's surprise, still not sanctioned, and not export controlled.

Controlling the export of exotic chemicals, and tool spare parts parts by only 1 vendor globally is infinitely easier than trying to control the shipment of chips themselves.

Now I start to think more and more of the rumours of intentional sanctions backdoors being left due to undue influence on export control bodies.
 
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Simply not true. Most of China's chip exports go to South Korea, Taiwan, Vietnam, Malaysia, India, and the Phillipines.
They then get assembled into products which get sold all over the world.

You are right, I was just being cheeky. Russia and North Korea have the best technology the US has to offer, through third, fourth, and fifth parties. :ROFLMAO:
 
And it is likely as completely dependent on imported consumables an any mainland fab, and which are to everyoned amusement still not sanctioned, and not export controlled.
The Chinese currently depend on chemicals and photoresist imports. They make their own wafers. SMIC makes their own masks. They make their own mask materials.

But Taiwan and South Korea import Chinese neon, gallium, and germanium. China is also the world's largest manufacturer of polysilicon which is used to make single crystal wafers.

The Chinese could also ban the export of rare earths like Neodymium or Erbium.
 
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China is also the world's largest manufacturer of polysilicon

Solar panel grade silicon is made by much cheaper process than nine nines microelectronics grade silicon. I do not think there is any pathway where solar panel materials intersects with silicon for electronics. And I think they wouldn't be continuing importing wafers in the volumes they do, if their own were good.

Gallium, rare earths etc, are not used by the semiconductor industry in volumes comparable to metallurgical, and chemical industries.

Saying this, I wonder, do people who inserted the backdoor into sanctions did it out of fear of retaliation? Were China to do so, it wouldn't be just puny microchips, it will be something much more immediately painful, like medicines, fertilizer, or food additives.
 
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The Chinese currently depend on chemicals and photoresist imports. They make their own wafers. SMIC makes their own masks. They make their own mask materials.

But Taiwan and South Korea import Chinese neon, gallium, and germanium. China is also the world's largest manufacturer of polysilicon which is used to make single crystal wafers.

The Chinese could also ban the export of rare earths like Neodymium or Erbium.

Where do you get your info on SMIC making all their own masks?

Or do you mean they can purchase the masks they need without restriction?
 
The Russians sent a prototype of an UV-LED lithography machine for testing last year. It is meant to replace imported i-line lithography equipment which can make chips at 350nm process. The Russians also have produced a prototype of a KrF lithography machine recently and are in the process of developing their own ArF lithography machine.

Currently their best foundry production equipment at Mikron, that uses imported tools, uses KrF lithography and is capable of 90nm process.


Most of the volume is in either civilian government or state owned corporations like utilities. For example smartcard chips for credit cards, smartphones, public transportation cards, passports, or MPUs for smart meters.

The military only drives a small amount of the volume. For the most part these use legacy processes and technologies. The exception is leading edge weapons or platforms like the Su-57 fighter. But AFAIK even that only uses 90nm chips at best like the Elbrus-2SM.


They can make 90nm chips. This is better than what German companies like X-Fab can do.

Demand for chips and chipmaking equipment for the actual Russian military is so small they can easily smuggle it if they wanted to.


Most of these chips come from American companies like Analog Devices and Texas Instruments.

Most of the chip warehousing operations are in China. I bet if you order chips from those companies in the US you will likely get them from China as well.


Simply not true. Most of China's chip exports go to South Korea, Taiwan, Vietnam, Malaysia, India, and the Phillipines.
They then get assembled into products which get sold all over the world.
A bit harsh on X-Fab , they are a small company in a niche market.

They should have a 90nm from IBM via Infineon , but I guess that none of their product is currently requiring a transition to it.
 
I think they wouldn't be continuing importing wafers in the volumes they do, if their own were good.
Chinese wafer manufacturers just currently lack the capacity. Not that this situation will continue for long.

Chinese silicon wafer manufacturers like NSIG will double 300mm wafer capacity over the next two years and then double it again.

ZingSemi currently has 450,000 wafers per month capacity.

There are also several other players.

ESWIN currently has 500,000 wafers per month capacity.

Hangzhou Semiconductor Wafer currently has 1,000,000 wafers per month capacity. With 200,000 12" wafers.

A lot of information in public databases and research is outdated. Every time I look at the global positioning of Chinese chip materials or equipment manufacturers based on gross revenue or units sold the people aggregating the stats never take into account the Chinese companies current revenue.

The Chinese chip materials market is also way more fragmented that other markets. Which means the total aggregate production potential of the whole country is often underestimated by the industry as Western market analysts focus on per company results.

Where do you get your info on SMIC making all their own masks?
Or do you mean they can purchase the masks they need without restriction?
SMIC have their own mask shop. Just check their website.

It is up to their clients to decide if they want to use their mask services or not.

A bit harsh on X-Fab , they are a small company in a niche market.
They were formed from the ashes of the East German semiconductor industry. They were never properly funded by the unified German government. I have nothing against X-Fab per se, they do as much as they can given their extremely limited financing constraints. It is the only real deal German foundry that regular third parties can actually use.

The German government would rather dump tens of billions in subsidies to foreign companies like Intel, GlobalFoundries, or TSMC to setup facilities in Germany rather than finance their own chip industry with a single billion. So it is hardly surprising X-Fab is in the condition it currently is.

They should have a 90nm from IBM via Infineon , but I guess that none of their product is currently requiring a transition to it.
I think this is mostly used for internal consumption by Infineon as an IDM? I do not think they operate foundry services. I know some people in Germany who wanted to setup a chip business. They produced a simplified prototype at X-Fab just fine. But good luck setting up advanced production in Germany. They ended up giving up production at higher resolution nodes in both Siemens and GlobalFoundries. It was much easier for them to negotiate a deal with TSMC in Taiwan. And this was a business spun out of a West German government lab.
 
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That's not surprising. But the global trade has many other regions to grow in. Like Southeast Asia, South America, and the Asia Pacific region, as mentioned in this article.
 
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Solar panel grade silicon is made by much cheaper process than nine nines microelectronics grade silicon. I do not think there is any pathway where solar panel materials intersects with silicon for electronics. And I think they wouldn't be continuing importing wafers in the volumes they do, if their own were good.

The CEO of SUMCO is complaining that he is losing his business selling blank wafers in China.
This is from their Q3 2024 Earnings Call Transcript.

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From the conversation they seem to be losing YMTC as a client. Loss in sales of 400,000 to 500,000 wafers. I assume this is per quarter. YMTC is currently ramping up production from 100,000 to 200,000 wafers per month.
 
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