Global chipmakers have begun suspending semiconductor chip sales to Russia in the wake of Western sanctions introduced against Moscow following the launch of a military operation in Ukraine.
Last week, the US announced a package of measures aiming to undermine Russia’s military capability, which include a ban on chip sales to the country. According to Washington, the ban aims to stop Russia from receiving technology for military purposes or dual-use chips that could be used for both civilian and military equipment. This means that sales of most consumer-focused chips may not be targeted.
However, analysts say chipmakers may temporarily halt all chip deliveries while they assess which of their products fall under the new ban. Also, the US Department of Commerce has added 49 Russian companies to its Entity List, and these companies are now ineligible to purchase any type of chips made in the US or using American technology.
“With these export controls, we, together with our allies and partners, are technologically isolating Russia and degrading its military capabilities. Russia’s access to cutting-edge US and partner country technology will halt. Its defense industrial base and military and intelligence services will not be able to acquire most Western-made products,” Thea D. Rozman Kendler, the assistant secretary for export administration at the US Department of Commerce, said in a statement last Thursday.
In response to Washington’s announcement, the world’s largest manufacturer of chips, Taiwan-based TSMC, said on Friday it is fully committed to complying with new export control rules, after Taiwan’s government pledged to support international sanctions against Russia.
“TSMC complies with all applicable laws and regulations and is fully committed to complying with the new export control rules announced,” the company said in a statement.
Media reports state that TSMC has already suspended all chip sales to Russia and to third parties known to supply products to Russia while it analyses the new exports rules to make sure it fully complies. The largest US processor manufacturers, Intel and AMD, have also halted sales to Russia, RBC reported citing sources in the IT market.
Russian media outlets state that the suspensions of sales have been confirmed by the Russian Electronics Developers and Manufacturers Association (EDMA).
Some industry analysts say Russia could be vulnerable to the export ban because it doesn’t make the high-end chips needed for advanced computing, which are mostly made in Taiwan, South Korea, the United States, Europe, and Japan. The Semiconductor Industry Association (SIA), a trade group representing major brands such as Intel, AMD, IBM, Qualcomm, and Marvell, said it is “fully committed to complying with the new export control rules announced in response to the deeply disturbing events unfolding in Ukraine.”
However, according to data provided by the group, the impact of the chip export ban may not be what the West is expecting. The SIA stated that “Russia is not a significant direct consumer of semiconductors, accounting for less than 0.1% of global chip purchases.”
Meanwhile, in response to the chip export ban, Belarusian President Aleksander Lukashenko on Sunday offered to buy the necessary parts in Belarus, stating that the situation is “pushing for the closest cooperation.”
For more stories on economy & finance visit RT's business section