In 2023, Russia imported US$2 billion in chips through various channels, involving manufacturers such as Intel/AMD/ADI.

According to news on January 27, although the United States and its allies as well as pro-American countries and regions have previously adopted strict export controls on Russia due to the Russia-Ukraine conflict, they have especially restricted the export of key chips to Russia. However, Russia still imported US$2 billion worth of chips through some channels in the past year.

According to Bloomberg, citing confidential customs data, Russia imported more than $1.7 billion worth of chips from U.S. and European companies in the first nine months of 2023. Some chips are designed for client computers, others can be used by Russian secret services, and the rest are dual-purpose chips that can be used in weapons. More than half of the chips come from U.S. and European tech giants, the report said.

According to confidential Russian customs data seen by Bloomberg, of the $1.7 billion worth of chips in the mechanism, $1.2 billion worth of chips are produced by a total of 20 companies, including manufacturers from Europe and the United States. An estimated $500 million worth of chips may be produced by other smaller manufacturers.

Well-known brands involved include AMD (including Xilinx), Analog Devices, Intel (Altera), Infineon Technologies, Macom, Marvell, Microchip Semiconductor, NXPSemiconductors, STMicroElectronics, Realtek and Texas Instruments.

According to reports, although Russian chip imports declined in the fourth quarter, the country is likely to purchase various chips worth more than $2 billion in 2023.

According to reports, a large part of these restricted chips arrive in Russia through re-exports from third countries, including its largest neighbors as well as Türkiye and the United Arab Emirates.

The United States and the European Union have been actively trying to block these alternative supply routes, but so far, not very successfully. They are particularly focused on stemming the flow of dual-use and advanced goods that have been identified for military use or are critical to their production.

Major companies including AMD, Analog Devices, Intel, Infineon, Marvell, MicrochipNXP, STM and Texas Instruments all told Bloomberg that they are complying with the sanctions. They said they had stopped their business operations in Russia after the conflict between Russia and Ukraine broke out and implemented strict processes to ensure compliance. Additionally, they emphasized their commitment to preventing the illegal diversion of their products (i.e., they specifically prohibit their re-export to Russia and Belarus) and stated that they are working closely with the relevant authorities to monitor and control the distribution of their chips.

It should be noted that a large portion of the industry's chip sales are handled by distributors, who in turn own multiple dealers. The nature of this distribution chain means manufacturers are not always able to track where their products end up after being sold to these companies, although some specific military chips are subject to stricter tracking requirements.

The situation highlights the challenges faced by the United States and the European Union in trying to cut off supplies of advanced technologies to Russia. The sanctions are intended to hinder Russia's ability to maintain or upgrade military equipment. However, continued imports of these chips suggest that Russia has been able to maintain production of its military hardware, undermining the expected impact of sanctions.

At the same time, the European Union is developing a new sanctions package. Some member states are advocating for stricter measures, particularly against companies from third countries involved in trade in these chips, as well as those originating from the EU itself.