TSMC and other chipmakers begin to halt semiconductor shipments to Russia

The ban, which is also enacted by key US allies, is designed to stifle shipments to defense and other high-tech buyers in the aerospace and maritime technology sectors, but not to block shipments of consumer electronics, the Biden administration said.

TSMC has suspended all sales to Russia and third parties known to supply products to Russia while it sorts out sanctions rules to ensure it is in full compliance, according to a person familiar with the company’s business. company, who spoke on condition of anonymity to discuss sensitive matters. Questions.

In a statement, TSMC said it was “fully committed to complying with the newly announced export control rules.”

GlobalFoundries, the Malta, NY-based chipmaker, said it has also started complying with the rules. The company has a system in place to review and block any prohibited sales to Russia, said Karmi Leiman, the company’s head of government affairs and global trade, although he added that the size of the company’s sales to Russian buyers is “not significant”.

Leiman said the internal review system is similar to the one the company uses for Huawei, the Chinese tech giant that has been the target of U.S. sanctions for several years.

Intel, based in Santa Clara, Calif., said it “complies with all applicable export regulations and sanctions,” including new export controls focused on Russia.

Russia is vulnerable to the export ban because it does not produce consumer electronics or chips in large quantities, analysts say. In particular, it does not manufacture the high-end semiconductors needed for edge computing, an area dominated by Taiwan, South Korea, the United States, Europe and Japan.

TSMC’s participation in the sanctions is particularly damaging because the company is the world’s largest chipmaker, including the most advanced.

Among the chips that TSMC no longer manufactures and ships are Elbrus-branded semiconductors that are designed in Russia, according to the person familiar with TSMC’s business.

Russian military and security services use Elbrus chips in some computer applications, according to Kostas Tigkos, an electronics expert at Janes, a UK-based defense intelligence provider, who described the loss of help from TSMC. with the chips as “devastating” for Russia.

The Russian government has also encouraged major domestic companies and banks to use Elbrus chips in their computers, as the components are designed in Russia.

The Semiconductor Industry Association, a trade group representing major chipmakers, said its members are “fully committed to complying” with the new rules “in response to the deeply disturbing events unfolding in Ukraine.”

“While the impact of the new rules on Russia could be significant, Russia is not a significant direct consumer of semiconductors, accounting for less than 0.1% of global chip purchases, according to the World Semiconductor organization. Trade Statistics (WSTS),” the group said. chairman, John Neuffer, said in a statement.

The United States and other Western countries have long regulated sales to Russia of chips and other electronic components specially designed for military use. Any such sale already required a government license to proceed, industry experts said.

The new rules largely block the sale of dual-use chips, which have both military and commercial applications, to non-military users in Russia, including those in high-tech industries.

In a new move the US has only used once before – against China’s Huawei – it’s also forcing companies around the world to play by the rules and block such sales to Russia if they use American manufacturing equipment or software to produce chips. Most chip factories around the world use US-designed software or equipment, analysts say.

This approach is called the foreign direct proceeds rule.

“With these export controls, we, along with our allies and partners, are technologically isolating Russia and degrading its military capabilities,” Thea D. Rozman Kendler, assistant secretary of commerce for industry and security, said Thursday. “Russia’s access to advanced technology from the United States and partner countries will stop. Its defense industrial base and its military and intelligence services will not be able to acquire most products made in the West.

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