Ukraine pushes domestic chip production to secure its defense tech sector

Ukraine's defence technology surge has outpaced its ability to source critical components, leaving the sector exposed to supply cuts, according to Deputy Minister of Digital Transformation Natalia Denikeieva. She highlighted the risk of losing access to batteries, semiconductors and motors from abroad, especially from China, and framed domestic component production as a survival issue. The ministry is preparing a Ukrainian Chips Act to integrate the country into the EU microelectronics market and to map realistic production capabilities.

The draft will be presented to parliament this year, aiming for an initial reading before the year ends, though the timeline for full legislative approval remains uncertain. Denikeieva also called for special tax and legal regimes to persuade firms to retain their intellectual property and financial interests in Ukraine, noting the role of the Diia.City framework in improving the business environment. Finally, she mentioned a proposal to channel domestic investment into a venture capital fund for tech innovators, pending legislative changes.