Illegal supply of microchips for Russian defence industry through China significantly decreases

Supplies of semiconductors and other dual-use goods to Russia have dropped significantly, but China and Hong Kong remain the largest centres for circumventing anti-Russian sanctions.

Source: Reuters with reference to previously unpublished data from the US Department of Commerce

Details: Deliveries of high-priority goods through Hong Kong – advanced components, including microelectronics, which the US and EU believe could be used in Russia's war in Ukraine – fell by 28% between January and May 2024. At the same time, shipments from mainland China, excluding Hong Kong, decreased by 19%.

The US Treasury said that this is due to several factors, including sanctions imposed by the US government, as well as its interaction with companies whose products are illegally imported into the Russian Federation.

Between August and December last year, more than 200 Hong Kong-registered companies shipped nearly US$2 billion worth of goods to Russian buyers, according to data from C4ADS, a Washington-based global non-profit security organisation.

Of these, US$750 million worth of advanced components were supplied by high-quality chips from the US-based Nvidia and French Vectrawave, as well as simpler chips from Texas Instruments and Intel.

As Reuters journalists found out, dozens of similar fictitious firms are registered in the offices of several Hong Kong companies at the addresses indicated in the registration documents.

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