On February 25, according to Reuters, TSMC said today that it will fully implement new “export” controls after the Taiwan authorities announced that they would follow the U.S. to sanction Russia. The company also said it had a strict compliance process in place to ensure it was strictly enforcing sanctions against Russia!

It is reported that 90% of Russia’s chips are imported. In October 2021, Russia’s Baikal Company received the first batch of Arm SoCs from TSMC, which is the first step in the self-development of the Russian electronics industry. The design of these chips is still at the 28nm node, and the performance is equivalent to the i3-7300T. From this aspect, the restrictions imposed by various countries on Russia will indeed affect the Russian chip market to a large extent.

Industry insiders on the island said that the global supply chain is long and complex, with cross-border and cross-regional characteristics. Taiwan’s semiconductor applications are mainly computer, communication and consumer electronics products, and there are not many semiconductor products that are indirectly exported to Russia for military supplies. Therefore, Taiwan Sanctions on Russia have a slight impact on Taiwan’s semiconductor industry.

The globalization of the semiconductor industry is extremely high, and any link affected will be reflected in the world market. Ukraine and Russia are both important sources of semiconductor raw materials. In addition to Ukraine, an important exporter of neon, Russia is an important exporter of palladium used in sensors, memory and packaging, accounting for 45% of global palladium production.

Although Micron, Intel, SK Hynix and other major manufacturers said that the sources of related raw materials are more diversified, they will not be greatly affected. But for some smaller semiconductor companies, they still face the risk of supply chain disruption. Even if production can be maintained, rising noble gas prices are already foreseeable, and this could lead to the next wave of price hikes for semiconductors.

Earlier today, U.S. President Biden announced a new round of sanctions against Russia. In addition to imposing sanctions on Russia’s largest banks and state-owned enterprises, it will also limit Russia’s ability to trade with U.S. dollars, euros, pounds and yen, and freeze all Russian assets in the United States, restricting the export of high-tech products to Russia, and suspending the Russian military’s access to funds and expansion capabilities. Subsequently, Japan, South Korea, and Australia also announced that they would sanction Russia.

But as the top three military powers in military strength, Russia has considerable accumulation in large and complex electronic tubes. The supply of chips will not affect Russia’s military strength, not to mention that Russia’s economic source is mainly natural resources, and sanctions on semiconductor products may not be able to prevent Russia’s actions in the short term.