Who's on board: “Russian” internet censorship electronics are not so Russian after all

There is no large-scale domestic electronics production in Russia. The intricate process of microchip fabrication requires collaboration among companies across various nations, making it nearly impossible to establish a complete production cycle within a single country. Furthermore, since the start of its full-scale invasion of Ukraine, Russia has been barred from importing complex electronics and other dual-use goods. In order to get around sanctions, distributors from third countries have been channeling Western-made chips and boards into Russia.

Conventionally, microchips are designed by major international corporations, manufactured in Taiwan, tested in Southeast Asia, and integrated into products in China before being exported worldwide. Russia is nevertheless working to establish a self-sufficient production cycle domestically. Since the start of the full-scale war, Russia has imported $130 million worth of equipment for electronics production, with only $50 million originating from China — much of the remainder came from countries that support the sanctions regime.

The Insider delved into the foreign procurements of Yadro Fab Dubna, a company within the Yadro group, which is involved in internet filtering in Russia. This entity, a part of X-Holding created under the aegis of oligarch Alisher Usmanov, aspires to integrate the entire electronics production cycle, from board printing and component assembly to casing production, product assembly, and testing. However, investigations by The Insider unveiled that Yadro Fab Dubna has imported goods worth over $19 million since the onset of full-scale conflict.

As we delve into the realm of high-tech machinery and components, it becomes evident that these items are not readily available for sale and do not pass through the hands of resellers. Therefore, it's safe to assert that the manufacturing companies were well aware that their products were destined for Russian firms.

Swiss boards for internet censorship

A few decades ago, producing a printed circuit board was a relatively straightforward process, requiring little more than a cutter and acid for etching tracks. However, modern boards are far more intricate to manufacture. They are crafted using specialized machinery, with the space between tracks often measuring a mere 75 microns. Notably, the machines used to produce these boards are not manufactured in Russia. They have been supplied to the sanctioned country from Switzerland via Poland.

Printprocess, a manufacturer of the equipment used for producing printed circuit boards, was actively engaged in trade with Russia prior to the full-scale war. In fact, as far back as 2015, a glowing report about a state-of-the-art printed circuit board factory in Dubna was featured in the specialized publication Technologies in the Electronics Industry. This facility boasted top-of-the-line equipment from leading foreign firms, including a drilling machine system from Germany's Schmoll, a horizontal positive process production line from the German firm Atotech, acidic etchant regeneration systems from Sweden's Sigma, and direct exposure machines from Switzerland's Printprocess.

Ostek-ST LLC was Printprocess's Russian representative and the importer of its products into Russia, with transportation facilitated by the Polish company Inter-Trans SP. Z O.O.

In response to inquiries from Tages-Anzeiger, Printprocess confirmed that their deliveries up until 2022 were indeed intended for Yadro. In 2021, Printprocess CEO Thomas Schmidt even visited Moscow, where he met with Yadro officials, including the CEO and the technical advisor (the latter hailing from IBM). That year, Printprocess dispatched three machines to Yadro via Inter-Trans. While two machines reached their final destination prior to the outbreak of the full-scale war, one remained at Inter-Trans's intermediate warehouse before being recalled. Schmidt made no mention of Ostek-ST's role in this process. However, according to customs data, Ostek-ST was the sole “agent” for Printprocess in Russia during this period, receiving equipment that was then delivered to Yadro Fab Dubna.

By 2022, Printprocess had severed ties with Inter-Trans, yet their equipment deliveries continued. Interestingly, both Ostek-ST and Inter-Trans remained in the picture, with Ostek-ST transitioning from recipient to supplier. Subsequently, Yadro Fab Dubna LLC became the direct recipient on the Russian side, with deliveries made under a Swiss brand but routed through Poland. For instance, in 2023, Yadro Fab Dubna received over $3 million worth of equipment designated for the production of semiconductor integrated circuits, as per customs records.

Machines of this caliber are never sold en masse; rather, they are supplied on a case-by-case basis. Manufacturers of such specialized machinery are fully cognizant of who the end users are and the purpose for which the equipment is intended. Despite requests from Tages-Anzeiger seeking clarification on the origins of the machinery in Poland and Russia, Printprocess CEO Schmidt declined to respond. He also opted not to engage with Swiss journalists in person.

Austrian robots in service of the sovereign RuNet

In May 2023, three industrial robots manufactured by the Austrian company Advanced Engineering were delivered to Yadro Fab Dubna via Poland. Despite being a relatively small shipment, totaling around $100,000, it was facilitated by Ostek-ST. Responding to The Insider's inquiry, Advanced Engineering stated: “Our client and contractual partner is based in a European country. Only some of the companies listed by you are known to us from previous business relations. We are unaware of any additional information you provided, so we cannot comment on it. Overall, it should be noted that our management regularly communicated with the Austrian Chamber of Commerce in 2022 and 2023 regarding which goods could be exported. By the end of May 2023, none of our products had been included in any sanction lists.”

However, this assertion conflicts with customs data, which classified the robots under HS code 848640 — a code that had been sanctioned as early as April 2022. In response to The Insider's further inquiry, the Austrian company claimed that the HS code mentioned in the customs data was “unknown” to them.

Italian machinery for printed circuit board production

Pola e Massa, a prominent player in the printed circuit board market with nearly half a century of experience, had actively traded with Russia before the war. Their machines, which are capable of performing various operations in board manufacturing — including grinding, surface preparation, and etching — were distributed through entities affiliated with Ostek-ST. Both the Italian company itself and intermediary firms in Europe, including Poland's Inter-Trans, acted as suppliers.

Since the full-scale war began, Yadro Fab Dubna had received Pola e Massa products worth over $1 million. These included equipment for manufacturing printed circuit boards, automated devices for loading/unloading semiconductor wafers, air cleaning devices, and installations for photoresist removal.

Pola e Massa did not respond to The Insider's inquiry about how their equipment ended up in Russia. Notably, the equipment supplied by Pola e Massa comprised both spare parts and complete installations, which typically aren't sold to resellers. Hence, it seems unlikely that Pola e Massa was unaware of the end user of their products.

Slovak chip exporter for Yadro

Traditionally, Chinese companies have been the main intermediaries in exporting microchips to Russia. However, Yadro has forged a different path in its supply chain. Yadro branded microchips are actually manufactured in Taiwan, the primary and nearly exclusive global hub for chip production. While some chips are developed in-house by Yadro, others are sourced from third-party developers. For example, microchips produced by Majestic Technology Corporation are routed to Russia through various intermediary companies. Among them, the leading entity is the Slovak company Telperien SRO, which has imported goods worth $9 million since the conflict began. Heading this company is Vladimir Pristupa, who is no stranger to navigating around sanctions. Another Slovak firm under his helm, Bompietro Trading, has imported electronics worth $80 million into Russia since the end of February 2022.

Korean equipment for pressing multilayer printed circuit boards

South Korea has publicly voiced its support for international efforts aimed at restricting Russia's access to technologies that could be used for military purposes — or for suppressing democracy. However, as previously reported by The Insider, the Russian military-industrial complex has been acquiring high-precision machinery from South Korea without any obstacles. It has now come to light that South Korea is also contributing to the production of internet censorship devices. In 2023, Yadro Fab Dubna received a multilayer printed circuit board pressing system from South Korea under the FME brand. The equipment was valued at over $3 million.