— In which sectors of the Russian economy are microelectronic components in highest demand?
— In Russia, the need spans communication systems, lighting, ventilation, control units, and more. These components find their way into almost every modern device: vacuum cleaners, computers, refrigerators, intercoms, and smart speakers.
Russian manufacturers blend domestic and imported components, though imports still outnumber locally produced parts.
The largest share of revenue comes from microcircuits and transistors.
— How is the Russian component market faring today?
“It is facing tough times. We previously distributed various foreign brands and had dealership-like relationships with them.
The market adapts quickly to new challenges, but in the last six months the sector has undergone a fundamental restructuring.
Currently, sanctions prevent routine work with the usual imported components.
— Does parallel importing address this issue?
— Yes, for many firms it has become the main sourcing channel. Parallel imports help meet production timelines and keep the final product’s price stable. Most importantly, they supply manufacturers with necessary components right away.
About 90% of foreign manufacturers cannot operate in Russia due to sanctions. Asia and parallel imports are the remaining channels.
Global manufacturers and distributors maintain stockpiles. Parallel imports to Russia also benefit them. The key point is discretion: unknown to many players that these goods are circulating.
Chips competition
— Can Russian manufacturers truly compete with foreign suppliers?
— Contrary to stereotypes, Russian firms produce reliable components. Surprisingly, many of these parts remain functional for decades.
Domestic products from the 1990s still sit in warehouses, and people buy them, trusting their durability. For thirty years, core technology in several products has changed little; the internal components are still familiar to users.
– Then why do non-Russian chips prefer foreign sources?
– Shortcomings of domestic parts include limited variety, less flexibility, longer production times, and constrained volumes. A factory might batch five types of microcircuits, while importers in the same sector offer dozens. In practice, most buyers still lean toward imports.
Domestic factories rarely hold large inventories. This pushes many buyers to choose imported options, even if domestic parts are closer in quality.
Delays are common: some items take more than a year to deliver. Price is another factor; certain parts are more expensive than imports, though in some cases domestic parts outperform foreign ones in quality and value. The gap often stems from scale and production costs.
— How does a Russian part compare in cost to an imported one, and why such a gap?
— Take chip resistors like RC0805FR-07100RL. Imports start around 16 kopecks, while a domestic analogue like R1-12 ShKAB.43410.002 runs around 10 rubles. Or DC-DC converters: the imported MAX1644EAE can be about 400 rubles, versus a domestic 1310PN1U around 600 rubles.
Across resistor chips and capacitors, cheaper imports remain common due to production scale and distribution networks.
Globalization of the component market
— Given these hurdles, can domestic manufacturers meet Russia’s needs?
“Self-sufficiency in this market is questionable. Microelectronics evolves quickly, with discoveries and trends emerging worldwide.
Countries complement each other through global cooperation rather than substitution. The focus should be on aligning products with current market requirements and ensuring suppliers respond rapidly to leading technologies, adding new lines when needed.
Military industry and smart speakers
— How has Elodika’s activity shifted under months of sanctions?
— Changing conditions are a major challenge today. The company does not plan to go abroad and has ambitious plans for the Russian market.
Clients include Yandex, Rostec, Roskosmos, Russian Helicopters, Sozvezdie Concern, and Ruselectronics.
Yandex purchases components from them and coordinates PCB assembly. Yandex.Stations are part of their work. They are also involved as Yandex moves toward delivery robots.
Starting with nine clients in 2017, today roughly 90% of their customers are government or near-government projects for modernization and development across the country.
— How did demand for your products change in 2022?
– State priorities shifted toward defense-related work. Interactions with customers were streamlined, and bureaucratic hurdles were reduced. Speed, flexibility, and result-focused processes became the prevailing market trends.
— There was a claim that Russian military took chips from washing machines for use in equipment. How realistic is that?
— It’s possible in theory, but there are many viable analogues available. Replacing household control units with military-grade components is complex and impractical; it is usually easier to procure dedicated parts.
Even if such stories exist, they reflect the market’s adaptability and the willingness to pursue alternative sourcing routes.
— How does the company source foreign components under sanctions?
— A five-year logistics framework supports parallel imports, easing the path for imports. Still, some challenges remain, and parallel imports have always existed. Previously, buyers trusted official dealers more and paid a premium for reliability.
Since spring, sanctions have made the landscape more dynamic. Microchips and other items now face added constraints, changing how routes and suppliers are managed.
Businesses that produce these components cannot always bring in parts. Thin-margin shipments from Chinese manufacturers have become common practice.
— Which companies that produce chips have exited the Russian market?
— Names like Schneider Electric, NXP, and Analog Devices suspended operations. Their products cover a wide range, but suitable analogues exist to fill the gaps.
Did you catch Taiwan?
— Can Russia address the plug shortage on its own? Has Taiwan been caught up in this?
— Microelectronics from China, the USA, South Korea, and Taiwan have long traditions of investment and expertise. These nations possess strong manufacturing bases, skilled professionals, and global competitiveness.
It may sound confident, but Russia can close the gap with world leaders. The first step is a favorable work environment and government backing for the sector. Russian microelectronics has a future, and it is being built here and now.
— How much time and resources are needed to reach world-class status?
— Things are not as dire as they seem. Factories are ready to expand, boost production, and reduce costs.
Yet everything hinges on the near term demand for imported goods. Is it wise for factories to invest tens of millions in new equipment before demand stabilizes?
Personally, caution seems prudent given the uncertainty about the market’s direction.
— What is expected for the industry in the next five years?
– Domestic component production is unlikely to rise quickly if sales remain uncertain. If sanctions persist for several more years, foreign supply from friend nations like China will step in to meet needs.
Legislation could help, for example by setting import quotas of around 30%, giving domestic manufacturers a clear path to expansion.
— Some wonder if China will dominate technology supply. Is that a risk?
There is no immediate danger seen. China offers cost-effective, diverse microelectronic products, but that does not imply dependency. Each country trades with others, seeking advantageous terms while maintaining options.
Ultimately, many firms require clear conditions on the use of military-industrial-grade components, with analogues available to replace restricted items when needed.