Sanction in action: More than half of Russian produced Baikal chips turned out to be defective

More than half of the Baikal chips produced by the Russian company “Baikal Electronics” turn out to be defective.

This was reported by the Russian newspaper “Vedomosti” with reference to local manufacturers of radio electronics.

Until 2022, “Baikal Electronics” outsourced the production of chips, including their packaging, to the leading Taiwanese factory TSMC. In 2021, the Russian company received 130 thousand processors and planned to increase the production of its chips in Taiwan to 600 thousand per year by 2025.

However, after the full-scale invasion of Ukraine by the Russian Federation and sanctions against the Russian technological sector, the Taiwanese TSMC ceased cooperation and refused to ship 300 thousand already assembled Baikal processors.

Following this, “Baikal Electronics” is attempting to set up the packaging of its chips in Russia. This is the final stage of processor production, which involves placing semiconductor crystals in the package.

At the same time, in Russia, only a few enterprises can assemble complex chips. Attempts to assemble Baikal chips at all of them are facing difficulties, and the defect rate exceeds 50%, according to sources cited by the publication.

The newspaper’s sources explain such a high defect rate as being due to the deficiencies in equipment at Russian enterprises, as well as the lack of necessary experience among employees. Consequently, the process of launching serial production is stretching over years.

“In Russia, they can package a small number of processors, but when it comes to a series, a lot of defects appear. Manufacturers cannot maintain an equally good level across all products,”

admits one of the sources.

As reported, the cost of processors from Russian developers MCST and “Baikal Electronics” doubled due to increased demand and the forced relocation of production to new factories after Taiwan’s refusal to manufacture chips for Russia.

Meanwhile, foreign processors continue to enter Russia despite sanctions. For instance, Intel’s share of the local market in 2022 increased by 9% to 782 thousand units. In total, foreign components accounted for about 90% of imports to the Russian Federation, while their customs value for the year also doubled. There is no data available for 2023 yet.

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