Russian defense imports microchips for $33M/mo amid sanctions
WASHINGTON, US — The first “weapon” that the West gave to Ukraine after February 24, 2022, when Russia invaded Ukraine, was the imposition of economic sanctions against Russia. They were not one-offs but continued throughout 2022. Most likely, following the trends, new sanctions will continue to pressure Moscow.
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Followed by the US, many European countries and other strong world economies have gradually limited their exports to Russia. What is worrying, however, is that Russian missiles not only continue to fly and hit Ukraine but there are no signs of stopping anytime soon. These are missiles with guidance systems that are controlled by integrated circuits, semiconductors, and computer chips, better known as microchips.
Here is an interesting fact – in 2014, Moscow met the first economic sanctions from the US and the West, after illegally annexing Crimea. At the time, Russian imports of microchips were $35 million per month. Today, after a year of war and sanctions much tougher, from many more countries and affecting many more sectors of Russia’s defense industry, Moscow imports $33 million worth of microchips a month.
Here is another fact – in 2023 Moscow will most likely reach the same value of microchip imports as it was in 2014. This shows the graph of C4ADS, U.N. Comtrade published in The Wall Street Journal. I.e. the growth trend of microchip imports from Russia is growing in direct proportion as follows: in April 2022, the import of microchips was nearly $15 million, in July of the same year it was nearly $22 million, in September it was $32 million and in October nearly $33 million.
Just think – during a war, when the major economies impose sanctions on Moscow, Russian defense restores the level of microchip imports from nine years ago. Considering that the Russian defense missile industry is perfectly capable of satisfying the needs of the Russian defense at the moment, continuing to produce tens of thousands of missiles per month, you can draw your own conclusion on who it depends on when the war will stop.
Another interesting fact – China can stop the war in Ukraine, even if Russian President Mr. Vladimir Putin wants to continue it. 72% of Russia’s microchip imports come from China. I.e. $24.5 million is paid monthly by the Russian defense to the Chinese computer industry to import specifically microchips. It remains unclear how much more millions Russia is giving to China for integrated circuits, semiconductors, spare parts, materials, components, and minerals.
According to some sources, such as C4ADS, China is even supplying Russia with spare parts for Su-35 fighter jets and S-400 air defense systems. However, this is highly unlikely, despite the claims. Just think – Russia continues to produce the Su-35 even for export [Iran], as it does the same with the S-400 [India]. If there was a shortage of spare parts, especially in wartime, these orders would be delayed dramatically. But they are being implemented, from what I hear – India started receiving its S-400s, while Iran expects its Su-35s last spring.
Also, Moscow has not granted Beijing license production of the two weapon systems. Despite the fraternal relationship between both countries. One more fact that refutes the C4ADS claim. On the contrary, they were part of technology transfer. China even has only one Su-35 squadron  and two S-400 regiments . In reality, the West is better off claiming that India supplies spare parts. India produces Russian Su-30SMs under license.
Mr. Putin made a decisive move shortly before the Russian army invaded Ukraine. He spoke with Chinese leader Mr. Xi Jinping and the two shook hands, signing a “boundless partnership” between two Russia and China. Knowing what would follow, the Russian president provided his military industry with access to the microchip labs of the Chinese defense industry. And although Beijing is trying to play the role of a disinterested party in the war in Ukraine, the fact is that Russian defense is fully benefiting from the “boundless partnership“.
It’s not just the microchips. There are reports of large deliveries of Chinese drones for civilian use to the Russian Federation. In Russia, they can easily be modified for the needs of the Russian army. Even used as corrective artillery fire or reconnaissance assets, Chinese drones are becoming a necessary weapon of Mr. Putin’s war.
China denies helping Russia. A spokesman for the Chinese embassy in Washington, Mr. Liu Pengyu, called such claims “speculative and deliberately inflated, with no factual basis.” But the US monitors customs records. The US officials say at least 84,000 shipments from China have arrived in Russia. All these since the war began. In one part of it, parts needed for Russian weapon systems were spotted. Such products are often called “dual-use products.”
According to US authorities, navigation equipment was sent to Russia at the end of August last year. It has been recognized as necessary equipment for the Russian Mi-17 military helicopters. The recipient of the shipment was the largest Russian arms trading company Rosoboronexport. The same Russian company has received a Chinese antenna used to jam enemy communication and intended for integration into the RB-531BE multifunctional system for radio electronic suppression of radio communication systems.
In October, another Western-sanctioned Russian company, AO Kret, received components and spare parts from China that Washington says are being integrated and used in the Su-35 fighter jet. There are many more such shipments cited by The Wall Street Journal.
It appears that Beijing will continue to supply components and dual-use products directly or through third parties. Washington claims that Turkey, the United Arab Emirates, Uzbekistan, and others are part of a highly traceable supply chain to Russia. At the moment, the US cannot think of imposing sanctions on China, but it can try to cut off a part of the supply through third countries.
Washington’s efforts are aimed at cutting off the supply of goods made in third countries but using US parts. The so-called transshipment. According to American experts, Moscow will rely on the import of such goods in the coming months and years. Therefore, Washington will try to prevent the import of this type of goods.
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