Russia Seeks an Unconventional Path for Microelectronics Development

Russia needs to achieve complete self-reliance in the field of microelectronics. The president has issued a task — to nearly double the output of electronic products within the next six years. However, the Russian government believes that catching up with market leaders is meaningless; Russia should occupy a unique position in this market. Where has Russia made progress so far, and which products are still imported from abroad?

Russia still has a long way to go to achieve complete self-reliance in microelectronics. At the plenary session of the "Microelectronics by 2025" forum, Prime Minister Mikhail Mishustin stated that if Russia were to follow the development path of leading countries, it would be almost impossible to catch up with them; to achieve major achievements, it must rely on unconventional ideas and solutions.

"Without the support of the state in this field, we will not be able to succeed." In the initial stages of production, the state will subsidize the price difference between domestic and imported components. Deputy Prime Minister Denis Manturov explained that this measure is necessary because, due to the small scale of mass production, the prices of Russian components are often much higher than those of imported counterparts. Anton Alikhanov, Minister of Industry and Trade of Russia, also revealed that the plan includes providing subsidized loans for the purchase of Russian electronic components, with a maximum subsidy rate of 10%.

Despite the sanctions, the Russian microelectronics industry has made progress. Over the past five years, the value of the microelectronics sector has doubled, reaching 3.4 trillion rubles; it is expected to exceed 3.5 trillion rubles this year. Mishustin pointed out that the president has set a task — to increase the output of electronic industrial products to 6.6 trillion rubles (nearly doubling) within the next six years, which would meet the needs of 70% of the population. He emphasized that developing the domestic electronics industry is a strategic priority for Russia.

The product solution portfolio in the Russian microelectronics field has expanded to 36,000 items, while the number was only 2,500 in 2020, showing a huge disparity.

The industry has received billions of rubles in investment. Mishustin mentioned that over the past 10 years, the budget has invested about 17 billion rubles into new product categories, and based on these funds, Russia has launched more than 500 key electronic component and software-hardware system R&D projects.

In just the past three years, investments in the electronics industry have exceeded 30 billion rubles; an additional 10 billion rubles will be allocated in 2025. The development of the industry also requires high-level talent. More than 3,500 new jobs will be added to this field next year.

However, the path of industry development is not smooth.

"During the Soviet era, the microelectronics industry developed within the framework of the unified national economic complex, with production distributed across various republics. In the 1990s, the collapse of this system caused catastrophic damage to the industry. After the 1990s, global trends changed: countries no longer pursued 'self-sufficiency,' but instead integrated into global value chains."

— Anastasia Medvedeva, a researcher at the Artificial Intelligence, Neural Technologies, and Business Analytics Teaching and Research Laboratory at Plekhanov Russian University of Economics, said this.

"In fact, only a few Eastern and Western countries have mature microelectronics technology, as this field requires substantial investment. Therefore, many countries choose to import electronic products and focus their efforts on economically competitive areas of their own countries, such as tourism, mineral mining, wine production, and cheese making. From the perspective of a market economy and international trade, this approach is reasonable, but it does not take into account factors such as differences between countries and sanctions," said Leonid Delitsyn, an analyst at the "Finam" Group (FG «Finam»).

Russia once relied heavily on imports. Although some progress has been made during the sanctions period, the process has been challenging. Medvedeva pointed out: "The difficulty lies in the systemic dependence that has been formed over a long period, which cannot be quickly broken. All factors, including technology, talent, and capital, are interrelated, and we still have gaps in our production processes. Global leading manufacturers like TSMC and Samsung have already mass-produced chips with 3-2 nanometer processes, while Russian factories such as "Micron" and "Angstrom" are still working on 90-65 nanometer processes, with future goals of 28 nanometers, showing a significant generation gap."

In addition, Russia faces market issues — the price of domestic products is much higher than that of imported products. Medvedeva cited an example: a Russian microprocessor with performance equivalent to imported products from 5-10 years ago may cost two to three times more than its imported counterpart.

Vladimir Chernov, an analyst at Freedom Finance Global, believes that the high price of Russian products stems from multiple factors: "Firstly, the small production volume leads to high unit costs; secondly, the production lines are outdated — still using 200mm wafers instead of 300mm wafers, which increases waste and reduces the yield of qualified crystals; thirdly, the proportion of imported materials is high, and some equipment needs to be procured through complex channels, resulting in price premiums; fourthly, access to advanced electronic design automation (EDA) software is limited, leading to higher chip design costs and longer cycles."

"Semiconductor production is an extremely complex process, involving thousands of procedures in aspects such as design, manufacturing, packaging, testing, and assembly. These steps depend on a complex global supply chain system composed of chemical products to software."

"For example, the production of certain integrated circuits requires 500 types of special chemical products. Some semiconductor production processes are controlled by only a few companies or economies. The United States, Japan, and Taiwan in China largely monopolize this market. Therefore, subsidizing the price difference between domestic and imported components is a necessary measure to promote industry development," said Antonina Levashenko, head of the Best International Practices Analysis Laboratory at the Gaidar Institute.

According to market participants, Russian chip prices are 30%-70% higher than those of imported counterparts; in some niche areas, especially in products requiring large-scale production based on mature processes (such as controllers and memory), the price gap can even reach twice. Chernov said that this is precisely why the Ministry of Industry and Trade of Russia introduced the subsidy mechanism — otherwise, enterprises would not purchase Russian electronic components, as buyers often prioritize price.

However, the development trend of Russia in some microelectronics fields is very promising.

"Russia has made progress in the development of microelectronics for military and aerospace applications. For example, it has developed chips that can work stably in the space radiation environment, which is a highly difficult technical breakthrough."

"The leading companies in this field include the All-Russian Research Institute of Microelectronics (NIIMЭ) and Micron, which have launched the 'Committee' series of chips," Medvedeva noted.

This expert added that Russia has advantages in some specific products: radiation-resistant microprocessors for spacecraft, domestic programmable logic devices (PLDs) used in the communication systems of the Ministry of Defense, and microcontrollers for civilian applications (such as the chip used in the "Mir" bank card)."

Levashenko stated: "The areas where Russia has developed well mainly include the research and development of logic integrated circuits (ICs) and memory chips. Additionally, the production of discrete semiconductor devices, analog integrated circuits, optoelectronic devices, and sensors (DAO) has also achieved good results."

However, Chernov also admitted: "Russia still needs to import advanced lithography equipment, high-precision measuring instruments, and some chemical products and photoresists from friendly countries, or obtain them through other channels; currently, we have not yet achieved independent production of 300mm wafer substrates and some materials required for processes below 65nm."

Delitsyn believes that Russia may not need to blindly chase global leaders, but rather focus on areas where local solutions are most urgently needed, such as communications, energy, transportation, and defense industries.

Chernov proposed three key development directions: "Firstly, not only pursuing smaller nanometer processes, but also exploring alternative paths, such as advanced packaging technology, multi-chip modules, and chiplet system integration. He believes that this approach allows for improving product performance and functionality without investing heavily in lithography equipment."

"The second direction is to widely promote the RISC-V architecture — this architecture has no licensing restrictions. If the country can build a complete ecosystem around this architecture, from IP core libraries to application software, as well as supporting bulk orders, Russia can establish an independent processor development system separate from the Western licensing system. Additionally, it should pay attention to promising materials, such as silicon carbide and gallium nitride used in power electronics, which are in high demand in the fields of transportation, energy, and renewable energy," Chernov added.

"Finally, the key to industry breakthroughs lies in human resources. Without the ability to train a large number of process engineers, EDA software programmers, and chip designers, even if more money is invested in equipment, the results will be minimal. Therefore, the country needs to develop targeted talent training plans," Chernov concluded.

Original: https://www.toutiao.com/article/7553181857781645867/

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