cardinal reorganization
— In which sectors of the Russian economy are microelectronic components most in demand?
– In Russia, communication systems, lighting, ventilation, control units, etc. They are present in any modern device: vacuum cleaner, computer, refrigerator, intercom, smart speaker.
Russian manufacturers use both domestic and imported components in their products, but there are many more imported components.
The lion’s share of revenue comes from microcircuits and transistors.
— How is the Russian component market feeling right now?
“He is going through difficult times. We were distributors of various foreign companies before, we had a kind of dealership relationship with them.
The market quickly adapts to new challenges and the situation in general, but in the last six months there has been a radical restructuring of its entire structure.
Now Russia is under sanctions that prevent work with “usual” imported components.
From the personal archive of K. Kirillov
— Does parallel importing solve this problem?
— Yes, for many businesses this is now the main channel for sourcing electronic components. Parallel imports make it possible to meet production times and maintain the usual cost of the final product. And most importantly, it can provide manufacturers with the necessary components “here and now”.
90% of foreign manufacturers cannot work with Russia due to sanctions. We are left with only Asia and parallel imports.
Global manufacturers and distributors have stocked warehouses. Parallel imports to Russia are also advantageous for them. The point is, “nobody knows that.”
Chips competition
— Can Russian manufacturers seriously compete with foreign suppliers?
— Contrary to common stereotypes, Russian enterprises produce quality products. Believe it or not, most of these products work well even after 20 years.
Domestic products of the 90s are still in warehouses and people are buying! They know these components will work.
For 30 years, technology has not changed much in many products. Maybe the situation has changed but the “filling” remains the same.
– Then why do non-Russian chips prefer abroad?
– The disadvantages of “our” products are a small assortment, lack of flexibility, production terms and volumes. For example, a factory produces five rows of microcircuits.
They are of good quality, but there can be 50 such lines in the importer companies in the same sector. Therefore, the lion’s share of Russian consumers of these products will still be considered imports.
None of our factories have a large warehouse stock. That’s why many businesses reject our suppliers in favor of imported ones.
Customers have to wait long for products or order well in advance. Some positions have been pending for over a year.
Another issue is price. Some parts are more expensive than imported ones, sometimes much more. Although they are not inferior in quality to China and Taiwan, and sometimes even surpass them.
– And how much does a Russian part cost compared to an imported one, and why is there such a price difference?
– For example, chip resistor RC0805FR-07100RL. Its price on import starts from 16 kopecks and its Russian analogue R1-12 ShKAB.43410.002 10 rubles. Or DC-DC converters (used to change the output voltage of electricity. – socialbites.ca). Imported MAX1644EAE can be found at 400 rubles, and domestic 1310PN1U is now sold at 600 rubles.
And all types of resistor chips, capacitors – imported replacement are also much cheaper than their domestic counterparts. This difference in price is due to the scale of sales and the cost of production.
Globalization of the component market
– Given all the disadvantages, will domestic manufacturers be able to meet all the needs in Russia?
“Self-sufficiency in this market is a very dubious goal. Microelectronics is developing rapidly. Scientific discoveries are made all over the world, new developments, trends and inventions are emerging.
Different countries complement each other in this market. And in general, the modern international economy is not about “substitution” but about cooperation.
It is more correct to talk about the compliance of products with modern market requirements. Suppliers and manufacturers must respond quickly to world leaders in this field and add new product lines.
Military industry and smart speakers
— How much has Elodika’s activity changed under months of sanctions?
— The ever-changing working conditions are among the key challenges of today. True, we still do not plan to go abroad. We have big plans for the Russian market.
Our customers include Yandex, Rostec, Roskosmos, Russian Helicopters, Sozvezdie Concern and Ruselectronics.
Yandex buys components from us and orders the installation of printed circuit boards. “Yandex.Stations” works for them. Now Yandex is completing the delivery robots and we are getting involved in it.
We started with nine clients in 2017 and now about 90% of our clients are government and near-government projects for the development and modernization of the country.
— How has the demand for your products changed in 2022?
– In 2022, the state shifted its priorities to the defense industry. In some cases, the procedure for interacting with customers has been simplified and bureaucratic procedures simplified. Speed, flexibility and focus on results have become the latest market trends.
– There was a story that the Russian military removed chips from washing machines to place them in military equipment. I’m interested in your opinion as an expert, how realistic is that?
– Funny story. Theoretically, of course, anything is possible. You can try to lure an owl into the world, but why? All electronic components have replaceable analogues, there are a lot of them.
It is very troublesome and unreasonable to remove a conditional controller from household appliances for further use for military purposes, it is easier to buy.
If such a strange story exists, we must respect the player’s flexibility of thinking and creativity.
— How do you procure foreign components for your own production under sanctions?
— We have established logistics for five years, as it is much easier for us than other players within the framework of parallel imports. However, I admit that there are some difficulties.
In fact, parallel imports have always existed. They just trusted the official dealers more: “Reliable, we better pay a little more.”
But since the spring of this year, things have gotten even more interesting. Microchip, chip etc. included in the sanctions.
From the personal archive of K. Kirillov
Businesses that produce all these cannot bring components. Now the thumbnail deliveries from Chinese manufacturers are protected, and that’s actually all.
— Which companies producing chips left the Russian market?
– Companies such as Schneider Electric, NXP and Analog Devices have suspended their work with Russia, their products are used in a wide variety of products, but this does not mean that they do not have analogues.
Did you catch Taiwan?
– Can Russia deal with the plug shortage problem on its own? Did you catch Taiwan?
— Microelectronics manufacturing in China, USA, South Korea and Taiwan has a large investment and historical background. These countries have strong manufacturing and technological bases, many specialists and attractive conditions for development at the global level.
It may sound overconfident, but Russia can catch up with world leaders. To do this, you must first create a suitable work environment. Financial support of the sector by the state will not be superfluous either. Russian microelectronics has a future, we are building it and bringing it closer.
— How much time and resources do you need to reach world level?
– I repeat once again – everything is far from being as bad as it seems. Factories are ready to grow, increase production capacity, produce products faster and lower prices.
But it all depends on the “here and now” people still buying imported goods. How important is it for our factories to take risks and buy machines for tens of millions of dollars?
Personally, I wouldn’t risk it: it’s a very uncertain situation. It is not clear what will happen next, in which direction the market will turn.
— What do you expect from your industry in the next five years?
– I do not expect an increase in the production of domestic components in the next five years: there is no guarantee of sales. Let’s assume that all sanctions will continue for a few more years.
At the same time, China, which is our friend, will quickly establish factories and meet all the needs of Russia in this area.
This is where legislation can help. For example, to set a quota for imported components – relatively speaking, no more than 30%. Then our manufacturers will see the future and begin to improve.
– Don’t you see the danger of China playing such a big role in technology supply? After all, it is unlikely that one of the leaders would want to give his full advantage, even in exchange for a lot of money.
We do not see any danger in this. China, like other countries we trade with, offers an advantageous proposition in terms of cost and variety of microelectronic products, but this does not mean “addiction” to them, more attractive products, that’s all.
A number of companies impose conditions on the use of microelectronics, produced, for example, at the enterprises of the military-industrial complex, but there are always analogues.
Source: Gazeta
Jackson Ruhl is a tech and sci-fi expert, who writes for “Social Bites”. He brings his readers the latest news and developments from the world of technology and science fiction.