Takshashila Issue Paper - The Semiconductor Question in the Russia-Ukraine Conflict
Executive Summary
The invasion of Ukraine by Russia has raised a lot of questions on the effect it might have on international technology supply chains. With the ongoing chip shortage and an intricate supply chain with a number of dependencies, semiconductors have had the spotlight on them in recent times. The involvement of Ukraine and Russia in providing/exporting crucial materials (like Neon and Palladium) that remain integral to the seamless functioning of the entire industry has increased fears of a global chip production dip again. The comprehensive arguments made in this issue paper are:
The existing dependencies on Russia and Ukraine are not critical and redundancies or alternatives have been set in place for the efficient running of the global semiconductor industry for the time being.
The sanctions, embargoes, and export controls placed by the US will result in a chip import starvation to Russia and will have a negative effect on the nascent domestic semiconductor industry of Russia, especially on its economic/strategic sectors such as space, telecommunications, and automotive industry.
Russia can look to exploit certain circumventing measures to continue chip supply due to Chinese chip imports being affected with Chinese semiconductor firms under threat of secondary sanctions from the US government for any future exports to Russia.
Authors
