Sanctions Against Russia: How Does It Affect the Semiconductor Industry?

On February 24, Russia launched an unprecedented attack on Ukraine that stunned the world. This war of aggression not only results in thousands of unjustified deaths but also in an avalanche of sanctions and a refusal of global brands to do business with Russia. Its impact is reaching every part of life. 

Following are just a few examples of how companies around the world have responded to Russia’s aggression:

Aviation and automotive industry

• exit from the market — Boeing, Audi, Chevrolet, Cadillac, Jaguar.
• blockage in the supply chain — BMW, Ford, Harley Davidson, General Motors.

Media and social networks

• restrictions for accounts from the Russian Federation — Facebook, Instagram, Twitter.
• blocking registration or subscription payments to Russian citizens — Netflix, Spotify.
• BBC licenses revoked.
• LinkedIn — planning to leave the country.

Technologies

• exit from the market — Apple, Dell, Lenovo, Samsung.
• full block — Amazon, Adobe, etc.

A semiconductor industry response was also forthcoming.

Intel, TSMC, IBM, AMD, and other companies have stopped supplying Russia.

What awaits the semiconductor industry

Following the imposition of sanctions, the shares of most chip makers fell. There is no cause for concern. This won’t affect the businesses.

The Semiconductor Industry Association reports that Russia is not a significant consumer of microchips. The Russian Federation makes up less than 0.1% of global chip purchases, according to World Semiconductor Trade Statistics (WSTS).

According to IDC, the Russian market for IT and communication technologies was only about $50.3 billion, compared to the $4.47 trillion global market.

Similar statistics apply to other technologies:

• Russia accounts for less than 2% of world PC supplies,
• ~ 2% of deliveries of phones and smartphones,
• ~ 1% of server deliveries,
• and ~ 2% of car deliveries.

Russian manufacturers to face sanctions

The longer the sanctions last, the more likely it becomes that Russia will replicate Iran’s experience and start buying equipment illegally. After all, it is not easy to rely exclusively on imports from China – Chinese chips lag far behind the development of TSMC and Intel.

What should we do

Keep calm and support those who need it most.