Russia purchased machines for microelectronics production despite sanctions

7 November, 2024 Production of microelectronics. Illustrative photo. The industrial capacities of Mikropribor, Russia's main military electronics company, are now half made up of Western machines, some of which were imported during the full-scale invasion.

InformNapalm investigators reported that the surveillance operation on the Russian defense enterprise Mikropribor lasted two years and was made possible through cooperation with the private analytical and intelligence company Dalas. In particular, they managed to upload spyware to the plant's internal network. As a result, the technical specifications of the weapons manufactured by Mikropribor were obtained.

The collected data allows examining and assessing the company's dependence on Western-made machine tools and to form an idea of the overall supply of the Russian defense industry with production equipment. Despite the long-standing policy of import substitution introduced by the Russian government long before the full-scale invasion of Ukraine, the Russian defense industry has remained dependent on Western-made machines and equipment. In particular, the evidence is the scale of shadow imports.

One of the documents of Mikropribor JSC discloses information about the company's supply of production equipment. It is an analytical note on the state of the company at the beginning of 2022. It makes it clear that a significant part of the "Russian" plant is foreign facilities.

The above excerpt regards the machining section. It shows that the newest equipment (up to five years old) is almost entirely foreign, and the share of machine tools coming from Russia's friendly China is low.

The situation is somewhat better with equipment that is five to 10 years old, but at least half of it is again foreign (made in Germany and Taiwan). An important detail is that the share of new Russian equipment at the plant 12 years ago was higher than seven years ago, although given Russia's policy, the opposite should have been the case. There are more Russian devices in the assembly shop than in the machining department.

But in the control and measurement department, most of the equipment is also foreign. China, as in previous cases, is not the only supplier from abroad. The documents show that Western manufacturers have made a decisive contribution to the establishment of production at the Mikropribor plant.

This is a military plant that works on "priority weapons". The authors of the analytical note directly state this. In particular, 45 out of 100 samples of new equipment (less than 10 years old) for the production of Russian weapons (for example, the Su-57 fighter jet) were imported equipment.

The percentage of imported equipment was even higher for newer equipment less than five years old: 18 samples out of 29 (62%). As of the time of writing (2022), Russia's aggression against Ukraine has been going on for eight years. The promotion of Russian anti-Western propaganda has been going on even longer.

Today, "Mikropribor" includes Taiwanese MCV-300 machines (manufactured by Long Chang Machinery Co ltd), Japanese-German DMG CTX 310, German Alzmetall ALZTRONIC 9, Czech Ergonomic, Italian ATS DSI 192, American Mini-Circuits ZHL-5W-1+, etc. Some changes did occur after the full-scale invasion. But the details show that they are very far from what the proponents of Russia's technological isolation would prefer.

The plant continues to be successfully "rearmed" with the latest equipment. The above analytical note states that as of the beginning of 2022, the control and measurement department of Mikropribor had four spectrum analyzers made in Germany, but by an unnamed company. Spectrum analyzers are used, for example, in the production of radio equipment.

At the same time, Mikropribor produces not only components for the Su-57, but also the Russian army radio station Arakhis-2. Documents show that Mikropribor continued to purchase German spectrum analyzers in 2023. The manufacturer also becomes uncovered: Rohde & Schwarz.

AMTEST LLC supplied such and similar products worth almost 30 million rubles in January 2023. Amtest LLC does not disguise anything and directly offers to supply measuring equipment "from world manufacturers to all regions of Russia" on the main page of its website.

There is currently no information on the imposition of sanctions against Amtest.

"Russian" machinery: German precision and Taiwanese quality for the Chinese yuan

The purchase of large machine tools also continued after the start of Russia's full-scale invasion of Ukraine. On July 27, 2022, the company entered into an agreement with KAMI-GROUP LLC for the supply of a KLE 360 CNC lathe with Siemens. The agreement contains a full product specification.

It makes it clear that the formally Chinese machine, which is the KLE 360, uses a large part of Taiwanese components. In particular, the Auto Strong and HIWIN companies. The software control is from the German company Siemens.

The example of Mikropribor shows to the smallest detail how China is "replacing" Western equipment in Russia. But "replaces" is in quotation marks. In February 2023, Mikropribor purchased equipment from DM Technologies LLC.

This contract is significant in a number of ways. DM Technologies is quite well known in Russia. For Russian propaganda, it is another symbol of successful "import substitution." At the end of 2023, the Russian media triumphantly reported on the launch of the production of Russian machine tools in Ulyanovsk under the COBALT brand.

However, this was not a new production facility: it was a renaming of DMG MORI RUS LLC (the Russian representative office of the Japanese-German Machine Tool Corporation), which already had facilities in Ulyanovsk. If you go to the DM Technologies website, you will see that they do offer machines under their own brand. In particular, the FM 9000V milling machine.

This is the one that Mikropribor purchased in February 2023. The contract contains a surprise: for some reason, a Russian plant buys a Russian machine from a Russian company, but they pay each other in Chinese yuan. This is not a typo.

Why is this the case? The Insider investigators explained this based on Russian customs documents.

In short, all the machines were imported from China, and in Russia, they just hang a sign with the name "DMT" on it. However, Mikropribor's contract allows us to look "under the hood" of the FM 9000V machine. And there, deeper problems are revealed.

The systems highlighted in yellow are not of Chinese origin.

The control software is traditionally from Siemens, a German company. Next, a measuring probe to minimize the human factor during production is also from the German company Blum-Novotest. US sanctions were imposed on DM Technologies LLC in December 2023.

However, there is no information on whether any restrictions were imposed or whether this is pressure against the company's counterparties in China. And most importantly, companies from other jurisdictions, such as Taiwan or Germany, are still not subject to clear additional requirements to request information about the end user of their products. Companies are not responsible for the delivery of their goods to Russia.

Therefore, the cost of their products for Russian buyers does not rise sky-high.