What do you want to know
- A new report claims that Intel and AMD are suspending sales of industrial processors to Russia.
- The companies would follow new rules set by OFAC and the BIS on selling technology to Russia in response to its invasion of Ukraine.
- The ban would not apply to consumer devices.
- TSMC, which makes Russian-designed chips, would comply with new export control rules against Russia.
A new report from RBC claims that Intel and AMD have “verbally notified Russian manufacturers” that the two companies are complying with a ban on supplying processors to Russia in response to its invasion of Ukraine. This ban on technology and exports is expected to take effect on March 3, although the RBC report suggests that Intel and AMD have already halted supplies.
In addition, according to RBC, partners in China were informed by the local Intel office about the ban on supplying processors to Russia.
The information is consistent with recent sanctions imposed by the Office of Foreign Assets Control (OFAC) of the United States Department of Treasury. For its reporting, RBC relied on two IT market sources, but additionally confirmed the news with a “representative of the Association of Russian Developers and Manufacturers of Electronics (ARPE)”.
A spokesperson for Intel in Russia responded to RBC and said that “the company is closely monitoring the situation and ensuring compliance with applicable sanctions and export control regulations, including new sanctions imposed by OFAC. and rules issued by the BIS”. BIS is the Bureau of Industry and Security of the US Department of Commerce.
However, if correct, it is important to note that Intel and AMD’s ban on sending chips to Russia does not involve “consumer communication devices”, including personal computers. , cell phones, digital cameras, etc. Instead, the ban on importing and selling processors only applies to industrial use by private companies, government entities, or those expressly sanctioned by the U.S. government “including the President, prime minister, deputy prime ministers, federal ministers, deputies of the State Duma and members of the Federation Council, editors and deputy editors of state media.
The ban could significantly hurt Russia’s economy in the long run, as companies won’t be able to upgrade, replace or expand the use of servers for cloud computing and data storage. The same goes for the use of “supercomputers” for heavy data processing. Exceptions could be made if companies apply for and are approved for export licenses, but this process could take months or longer.
Interestingly, Russia has its own growing processor business, including the MCST Elbrus-8C server processor. Still, it was slammed by reviewers as “very weak” compared to Intel’s “Cascade Lake” Xeon processor. Moreover, like many microprocessor companies, the Moscow Center of SPARC Technologies (MCST) does not manufacture chips but only designs them. Taiwan’s TSMC is the maker of the Elbrus, and in a Reuters report, TSMC noted that it would comply with new export control rules on Russia, jeopardizing that backup plan. However, to date, the chip foundry has not officially announced to Russian authorities that it will block the production of Russian processors.
If the ban takes effect, it remains to be seen what other avenues Russia might take to procure transformers. Going through China seems the most obvious route, especially since the two countries maintain a close strategic alliance. Still, even going through return channels and taking advantage of re-export maneuvers, the prices of these components could increase by 30% for Russian companies to obtain such technology, according to RBC.
Questions also remain about the distinction between consumer use and industrial use of devices, including pre-assembled computers, and how US companies will navigate the sanctions.
NVIDIA, one of the world’s largest and most important GPU vendors for services, AI, and industrial use, has so far not commented on the new Bureau of Industry and Security (BIS) rules. of the US Department of Commerce. Similar calls for Microsoft to ban the export of software to Russia have also been made, although the company has not commented so far.