The US Department of Commerce has issued sweeping technology export controls against Russia. These controls include both US-made goods and also products made elsewhere in the world using US technology, software and intellectual property.  

The items listed include semiconductors, computers, telecommunications, information security equipment, lasers, and sensors. The rule imposes stringent controls on 49 Russian military end users, which have been added to an entity list by the Bureau of Industry and Security (BIS).

The restrictions are intended to target Russia’s defense, aerospace and maritime sectors, the Department of Commerce said in a statement. But with the concept of potential ‘dual-use’ applied to many semiconductors, the regulations will represent a significant prohibition on the export of semiconductor components and electronic equipment.

“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. Even most products made overseas using sensitive US technology will be restricted for export to Russia,” said Thea D. Rozman Kendler, the Assistant Secretary of Commerce for Export Administration, in a statement.

The Department of Commerce said that the European Union (EU), Japan, Australia, the United Kingdom, Canada, and New Zealand were all in agreement on the export control policies and requirements with more countries expected to express support.

However, the sanctions regime could also produce problems for the global semiconductor industry if Russia tries to retaliate in kind. Russia holds key positions in the supply of some raw and refined minerals.

Techcet CA LLC (San Diego, Calif.) a consultancy specializing in critical materials for semiconductor production, has highlighted US dependencies on neon, palladium and hexafluorobutadiene (C4F6). C4F6 is an etching gas used for processes that need high aspect ratios and selectivity. Russia supplies about one third of global demand for palladium. Neon is purified by a Ukrainian company for use as a laser gas used in optical lithography.

SIA gives support

Nonetheless, the US semiconductor industry is committed to supporting these export controls, according to a statement from the Semiconductor Industry Association (SIA).

In a statement SIA CEO John Neuffer said: “We are still reviewing the new rules to determine their impact on our industry. While the impact of the new rules to Russia could be significant, Russia is not a significant direct consumer of semiconductors, accounting for less than 0.1 percent of global chip purchases, according to the World Semiconductor Trade Statistics (WSTS) organization. The broader Russian ICT market totaled only about $50.3 billion out of the $4.47 trillion global market, according to 2021 IDC data.”

Neuffer added: “In addition, the semiconductor industry has a diverse set of suppliers of key materials and gases, so we do not believe there are immediate supply disruption risks related to Russia and Ukraine.”

Elsewhere Taiwan and Japan have announced support for the measures announced by President Joe Biden, while South Korea has been more nuanced in its response.

In a statement TSMC said: “TSMC complies with all applicable laws and regulations and is fully committed to complying with the new export control rules announced. The company also has a rigorous export control system in place, including a robust assessment and review process to ensure export control restrictions are followed.”

South Korea’s nuanced response

South Korea said it would join the international community imposing export controls against Russia, if there was a full-fledged invasion of Ukraine, but did not say it would impose its own measures against Moscow.

“The government has no other option but to join sanctions against Russia, including export controls,” the South Korean foreign ministry said in a statement reported by the Yonhap news agency. South Korea is a major supplier of semiconductors and electronics and has strong sales ties to Russia.

China is not expected to comply with the export controls. Chinese channels and media outlets have referred to Russian military operations in Ukraine, but not to an invasion. President Xi Jinping and his Russian counterpart, Vladimir Putin, reportedly had a telephone conversation on Friday February 25 in which President Xi, stressed the importance of resolving the crisis through negotiations.

Related links and articles:

Opinion: Chip sanctions against Russia could boost China

SMIC plans for $9 billion Shanghai wafer fab

Russian organic electronics factory gets production-ready

China will miss 2025 IC self-sufficiency goals

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