Sanctions Push Russia into Costly China-Centred Chip Supply Chains, Undermining Tech Autonomy

Western sanctions have forced Russia to rely on expensive, China-mediated semiconductor imports, limiting its access to cutting-edge AI hardware.

Broad sanctions imposed by the United States, European Union and other Western nations have severely restricted Russia's ability to obtain advanced semiconductors, prompting a pivot toward costly, China-focused supply chains. TSMC ceased sales to Russia, and export controls from Japan and South Korea further narrowed options, leaving domestic efforts like the Baikal and Elbrus projects stalled and the Mikron plant operating at outdated 90 nm nodes.

By the end of 2024, Baikal Electronics reported 85,000 chips produced, though many were defective due to calibration issues and a shortage of skilled staff. Trade figures reveal a dramatic decline in chip imports from the West—down over 98%—and a corresponding rise in shipments routed through Turkey, India and China, which has doubled Russia's semiconductor expenses. The evolving US-China licensing regime for high-end chips indirectly affects Russian access, as tighter controls on Chinese foundries raise compliance risks for Moscow's buyers.

Consequently, Russian firms are focusing on optimizing older hardware, with Yandex and Sber adapting models to run on less advanced chips. The overall outlook suggests short-term resilience but long-term constraints on Russia's technological sovereignty.