The UK has extended sanctions against Russia to domestic developers of MCST processors and Baikal Electronics. In addition to the freezing of assets, the sanctions imply restrictions on the provision of technological services. Thus, companies are threatened with a ban on the use of the British ARM architecture, which may stop the release of new processors. Developers will have to look for a factory that will violate patent law, or switch to open architectures, experts say.
The UK sanctions list, published on May 4, includes Russian processor manufacturers: JSC MCST (produces Elbrus processors) and JSC Baikal Electronics (produces Baikal processors). The latter uses a license for the processor architecture of the British company ARM (processors from Apple, Nvidia, Qualcomm, Samsung and other manufacturers work on it).
The sanctions involve freezing assets in the country and limiting work with counterparties.
In particular, we are talking about a ban on the provision of technological services and financing, including the provision of grants, loans and contributions to the authorized capital, explains the managing partner of Ickert and Partners Pavel Ickert.
British companies are prohibited from continuing any legal relationship with companies subject to restrictions, says Sergey Glandin, head of sanctions law and compliance at Pen & Paper: “The new sanctions do not oblige British companies to revoke their already issued intellectual property licenses. But paying for new licenses without the permission of the Office for the Implementation of Financial Sanctions (OFCI) will not work.” JSC MCST and JSC Baikal Electronics declined to comment.
Domestic manufacturers of processors, including Baikal Electronics, JSC MCST, STC Modul and MTC Elvis, were already subject to US sanctions in March. All foreign partners must coordinate with the Bureau of Industry and Security (BIS) of the US Department of Commerce the supply of their technological products to Russian companies (see Kommersant of March 5).
According to a Kommersant source in the market, Baikal Electronics, which releases its processors under license from the British ARM, owns design and manufacturing licenses for all processors up to Baikal S (16 nm topology).
However, for processors that are under development (Baikal M2, Baikal L, Baikal S2), the company has only design licenses.
Without a production license, not a single factory will work with the company (for example, Taiwanese TSMC, the largest manufacturer and traditional partner of Russian enterprises), explains another Kommersant interlocutor. In the case of the MCST operating on its own architecture, in his opinion, "everything depends on access to the factory and the design rules for its technological processes."
Under such conditions, Baikal Electronics will actually not be able to produce new processors at the largest semiconductor factories: UMC, Global Foundries and TSMC, a Kommersant source in the industry confirms. “There are few options: either look for a factory that will violate ARM's patent law, or transfer your developments to open processor architectures, such as RISK V, MIPS, VLIW,” he says. But this, Kommersant's interlocutor adds, will require a redesign of the entire processor, which will take two to three years and require up to 1 billion rubles.
Against the backdrop of tough and growing sanctions pressure, the Russian authorities have already expanded measures to support the industry, reducing income tax rates to 3% and insurance premium rates to 7.6% for companies that produce or sell independently developed electronic component base products. The preliminary version of the national project in the field of radio electronics involves funding in the amount of 3.19 trillion rubles. until 2030 (see Kommersant dated April 15). But, according to one of Kommersant's interlocutors in the market, given the limited access to equipment, development tools and licenses, even if such funds are allocated, it will be very difficult to create your own production from scratch.