Unique microcircuits that are essential for missile and drone navigation, internet content filtering and facial recognition continue to be imported into Russia. Such semiconductor devices, called FPGAs (programmable logic integrated circuits), are produced mainly by American companies Intel and AMD. The export of FPGAs to Russia for military purposes was banned without a license back in 2020. In 2022, a broader embargo was introduced on the export of microcircuits to Russia, regardless of who would receive them and for what purpose. Even when exporting to third countries, buyers were subject to in-person inspection by special commissions of manufacturing companies to ensure that the FPGAs would not end up in Russia for military use. But the companies simply ignore this procedure, The Insider found out.
Microcircuits produced by American companies have repeatedly been found in missiles, drones and military aircraft that bomb Ukrainian cities. Among them are chips that are considered dual-use goods in international documents. This means that they can be used or are even most often used in military equipment and technologies or in surveillance technologies. These types of devices include programmable logic integrated circuits. The navigation system of the X-101 missile, which Russia launched at the Okhmatdit Children's Hospital in Kiev in July 2024, used Xilinx integrated circuits (manufactured by AMD). Similar, but more advanced chips are also in the Lancet UAV. Xilinx and Altera crystals (manufactured by Intel) are used in the navigation of Iskander and Kalibr missiles. FPGAs, which are used in military technologies, continue to be imported to Russia, despite all sorts of sanctions, trade embargoes and restrictions.
Not a single FPGA to the Russian military (on paper)
It cannot be said that American companies only had to worry about their products being used in Russian weapons in 2022. Sending a high-performance FPGA from an American factory to Russia has never been easy — in theory. Back in 2020, the US Department of Commerce tightened controls on exports to Russia, China, and Venezuela.
FPGAs with performance above a certain (not very high) threshold were added to the list of dual-use goods, requiring mandatory licenses for export to Russia for military purposes (and they were denied by default).
Thus, FPGAs were effectively banned from being supplied to buyers associated with the military-industrial sphere, or "military end users" (meaning not only the military itself, but also intelligence agencies and security forces).
These restrictions were supposed to deprive manufacturers of weapons and surveillance technologies in Russia (as well as in China and Venezuela) of access to American developments. At the same time, suppliers are obliged, according to American law, to control who is the end user of their chips and not allow them to be reused by companies that produce military equipment or surveillance equipment. For this purpose, the Know Your Customer procedure was envisaged - a check of purchasing companies, including in person - by special commissions of manufacturing companies to ensure that FPGAs do not end up in Russia for military use.
Suppliers are obliged, according to American law, to control who is the end user of their chips
Even manufacturers of mass-market encryption devices lost access to FPGAs produced by AMD and Intel (both companies are registered in the USA, and Intel's physical production is mainly located in the States). Lawyers at Miller & Chevalier, a major law firm that advises companies on export control issues, issued a warning to their clients that this clarification in the legislation made it difficult for even developers of telecom and testing equipment to obtain an export license.
After Russia's invasion of Ukraine in 2022, Intel and AMD announced their withdrawal from Russia. That same year, an additional trade embargo was introduced on supplies from the United States to Russia, which included microcircuits. Unlike the bans on the export of dual-use goods, this embargo does not depend on the end user or the final purpose of use. It also does not depend on the parameters of the microcircuits. That is, since 2022, it does not matter who, for what purpose and what kind of FPGA is sent to Russia - all this is prohibited.
Since 2022, it does not matter who, for what purpose and what kind of FPGA is sent to Russia. All this is prohibited
However, the supply of microcircuits continued, as The Insider has already reported. In the two years since the war began, at least $216 million worth of Xilinx products have been shipped to Russia, while $120 million worth of Altera products have been shipped to Russia.
According to customs data, AMD and Intel have been turning a blind eye to the export of Xilinx and Altera chips to Russia for years, which have no domestic application. Transactions between Russian buyers and numerous intermediary firms that could not have the right to resell these chips to Russia suggest that instead of in-person control over the end user, the manufacturers could, at best, get away with worthless papers.
The Insider has found out how export control procedures have failed to prevent technology corporations from remaining in the service of the Russian military-industrial complex.
The Russian defense industry really needs FPGAs, but they don’t know how to make them — and they successfully buy them
Programmable logic devices themselves are not a military technology. FPGAs are needed where performance is important, not mass production. FPGA sales are growing rapidly worldwide, primarily due to demand for computing power in data centers and artificial intelligence and telecommunications (for example, they are in high demand among mobile operators - many mobile base stations have such chips). These devices are used where large amounts of data need to be processed very quickly, so one of the promising applications of FPGAs is computer vision and video object recognition systems based on it.
A device using FPGA will not have the versatility of a regular computer (which can play music, solve differential equations, and compare texts), but a specific task that requires a large number of identical calculations simultaneously (for example, face recognition, content filtering on the Internet, or automated trading) can be solved with stunning efficiency.
In Russia, such devices are practically not produced. The Mikron plant, which proudly calls itself the "heart of Russian high-tech", has only two FPGA models in its range. Its competitor, the Voronezh Semiconductor Devices Plant, produces three models of such microcircuits. The declared characteristics roughly correspond to the simplest FPGAs of their main global competitors - Xilinx and Altera. Xilinx was the undisputed leader on the Russian market. This company produces microcircuits that can contain millions of logic cells - Mikron cannot boast of this.
The Russian military and space industry needs powerful FPGAs, so companies are buying American products despite all the restrictions and export control rules — even in 2024. Naturally, it is not manufacturers associated with the military-industrial complex who are engaged in the purchases, but ordinary distribution companies.
FPGAs in Russia: radar, internet censorship and facial recognition
FPGAs are used not only in missiles and drones. Very often, such chips are used in radar technologies — primarily military ones. This is evidenced by the data on the purchase of Xilinx chips by Russian enterprises and design bureaus, and the data on patents and applications for inventions that can be found in the Rospatent database. Vacancies for FPGA programmers are posted by Russian defense and space enterprises — and most often, the brands mentioned are Xilinx and Altera. Xilinx chips are in the Angara launch vehicles and installations for measuring radio signals.
Xilinx FPGAs are also used in the hardware systems for encryption and protection of information "Continent" and "Sobol", which are produced by the company "Security Code". Despite the fact that the company has long been under US sanctions, it is working on new software and hardware systems using the most advanced American microcircuits. Subsequently, such systems are used, for example, in Internet filtering technologies, as The Insider has already reported. However, "Security Code" complained back in 2022 about the lack of imported components for its firewalls - devices that filter traffic. The same problems with imported electronics were experienced by the company UserGate, which also produces systems for filtering traffic.
Government procurement data confirms the ongoing supply of components to Russian defense industry enterprises. For example, sanctions did not prevent the Ural Optical and Mechanical Plant from purchasing and using Xilinx microcircuits. Although the enterprise also produces civilian products, it is primarily a supplier of optical-electronic systems for the Russian army. The boards of the American manufacturer, worth tens of thousands of dollars, were also purchased by the Orion Scientific and Technical Center, which produces hardware and software for the FSB. Also, after the introduction of restrictions, high-performance microcircuits were supplied to TsKBA, an enterprise that produces navigation systems for Russian military missiles. Another promising application of FPGAs is video surveillance systems with facial recognition, The Insider's sources say. We are talking about the most advanced microcircuits such as the Xilinx Ultrascale+ series. Until 2022, the company even promoted similar solutions on the Russian market. Using specialized expensive hardware, video streams from all cameras are processed every second to single out people's faces from the crowd and compare them with databases.
One of the promising applications of FPGAs is video surveillance systems with face recognition
Deep filtering of the Internet (what allows censors to recognize and block VPNs or specific applications, such as YouTube or Telegram) is most effective when implemented on FPGAs.
FPGAs are also critical for solving certain mathematical problems, such as finding Dedekind numbers. Calculating the eighth Dedekind number on a regular laptop takes eight minutes, but calculating the ninth would take several hundred thousand years. However, using a supercomputer on FPGAs, the problem was solved in five months. This is a very nice result, but it is unlikely that anyone in modern Russia is investing money in finding Dedekind numbers. How export controls and trade embargoes (don't) work
A foreign company that has no connection to Russia or military technologies told The Insider about how the sale of complex and expensive microcircuits is organized. For its equipment, it needed high-performance FPGAs from Altera, costing from $4,000 per piece. Sometimes the company ordered one or two microcircuits, sometimes a hundred at once. Even when buying several FPGAs, a commission of two or three people came to the buyer, which carried out a very thorough check - the same Know Your Customer procedure.
The manufacturer also requires a letter from the buyer indicating who the final recipient of the product is (however, many provide false information in such letters, which is why in-person checks are required). And to export goods from the United States, a special license will be required.
The inspectors insist that the import of supplied chips in "naked" form is completely prohibited in Russia, as well as as part of the equipment that is transferred to the Russian side along with the technology and rights to use. However, if any equipment is imported into Russia, the rights to which will not be transferred to a Russian person (like, say, you import your personal laptop into Russia, and it does not become the property of the government), and this person is not given access to the technology on which the FPGA works, then such deliveries may “go unscathed.”
Suppliers of equipment and electronics for the Russian defense industry have long since figured out that it is often enough to indicate a company in the EU or China as the final recipient, and American manufacturers will be ready to ship the goods. This “gray scheme” worked especially well before Russia’s full-scale invasion of Ukraine in 2022. For example, from at least 2000 to 2014, Pavel Flider, an emigrant naturalized in the United States, purchased dual-use electronics from American companies, including Xilinx FPGAs, and sold them to Russia through European “shell” companies. His company’s activities have repeatedly attracted the attention of regulators, but almost always they were satisfied with Flider’s explanation that his goods are not supplied to Russia. In reality, the recipients of the chips were Russian defense companies, which became known after Flider was detained and his home in San Francisco was searched in 2015. Flider eventually made a deal with the investigation, turned in other participants in the chip smuggling scheme to the US authorities, and got off with a large fine.
Suppliers of equipment and electronics for the Russian defense industry have long since figured out that it is often enough to indicate a company in the EU or China as the final recipient, and American manufacturers will be ready to send the goods
Flider is one of the few people caught illegally exporting electronics to Russia over the past 20 years (examples - one, two, three). The schemes uncovered by the FBI are usually similar to the one used by the convicted businessman. Apparently, this is how expensive microcircuits ended up in Russia, including to end up in missiles flying to Ukrainian cities.
How American FPGAs are supplied to Russia
Supplies of FPGAs and finished products with them often occur according to a scheme that has been tested many times in all sectors of the economy. Before the full-scale invasion of Ukraine, legal supplies were made through distribution companies. With the start of the war, they lost this status. Then foreign manufacturers seemed to have stopped doing business in Russia. But persons affiliated with the previous official suppliers — former owners, directors, employees, using their established connections in the market, opened new legal entities and launched exports through them.
For example, in 2018, the official distributor of Xilinx in Russia was OOO Makro Group. Inline Group also dealt with deliveries. Now in Russia, it is offered to buy Xilinx FPGAs through websites that are very similar to each other in design and content: fpga.su (owned by a certain Stanislav Bolt, associated with a number of companies, the most notable of which is Spetspostavka), plis2.ru (owned by Inline Group) and xilinxonline.ru (owned by OOO Snabinter).
These websites attract buyers with headlines like “Official distributor of Xilinx in Russia” or “Wholesale deliveries of scarce electronic components from the USA”. Although, of course, AMD cannot have any “official distributors” in Russia. However, the affiliation of some companies with former “officials” suggests that the connections of old distributors continue to work in this market. And AMD still (August 2024) mentions the address and phone number of its Moscow office on its website.
Retail companies that sell a wide range of electronic components from different companies also announce the sale of FPGAs in Russia. A diverse range of products with such boards is presented, for example, in the Robotics Shop robotics store and the Fregat components store.
Can we be sure that illegal FPGA supply channels continue to operate to this day? Apparently, yes. For example, the sanctioned company T-Component SP posts “special offers” for the supply of Xilinx FPGAs.
The sanctioned company T-Component SP posts “special offers” for the supply of Xilinx FPGAs
At the same time, T-Component posts photos of the chips on its website against the background of its proprietary substrate — apparently to confirm its ability to import the necessary goods to Russia. These images are in the section “The latest deliveries of Xilinx chips from T-Component”.
At the same time, the diagrams do not erase the batch numbers and other designations that would allow the manufacturing corporation to identify through which specific distributor this product came to Russia. The Insider sent AMD a request indicating the address of the page with photos of the product, but there was no response at the time of publication of this material. According to customs data, chips with markings corresponding to those indicated in the drawings were indeed imported to Russia, but in no case is T-Component SP listed as an importer.
This indicates, among other things, a certain futility of attempts to influence importing companies. It costs about $300 to create or close an LLC in Russia. This is less than the cost of an hour of a lawyer's work in Washington. At the same time, completely different companies can be engaged in actual deliveries.
Significant volumes of Xilinx top FPGAs (including those already built into boards) were delivered to Russia by the company ID Solution. It is associated with the company Merusoft, which deals with facial recognition technologies. ID Solution's purchases indicate that this company may be engaged in some kind of powerful parallel computing. The products they order allow for the assembly of a supercomputer, among other things. On the other hand, judging by the ID Solution website, it is engaged in the retail sale of FPGA to other consumers. Until now, it was believed that ID Solution was an intermediary in the purchase of drone components by Russian companies. Drones are equipped with microcircuits that can cost hundreds, but not tens of thousands of US dollars.
ID Solution, in particular, imported ready-made boards containing the latest FPGA matrices from Xilinx. The boards were manufactured by the American company Hitech Global.
In February 2023, ID Solution brought HTG-840 VIRTEX ULTRASCALE debug boards to Russia via Uzbekistan, containing the XCVU19P-1FSVB3824E FPGA, which costs more than $80,000. This is the most productive generation of programmable logic integrated circuits available on the market - Virtex UltraScale+, which was just released in 2023. This chip has 8,938,000 logic cells. For comparison: the above-mentioned XC2V1000TM circuit from the X-101 missile has only 11,520 cells - that is, about a thousand times less, and it costs about a thousand times less. ID Solution and Macro Group were the official distributors of Hitech Global in Russia. In 2014, Dmitry Veleslavov, Chairman of the Board of Directors of Macro Group, said in an interview with a specialized publication: “After the third wave of sanctions, we were faced with a ban on the supply of all new Xilinx families to Russia that fall under the “dual-use” category, including for civilian projects.” Thus, these companies could not have been unaware that they were violating sanctions legislation.
Judging by the customs declarations, in some cases the cargo was apparently not even repackaged in Tashkent, but immediately sent to Russia (the declarations indicate the same weight of goods on the way from the USA to Uzbekistan and from Uzbekistan to Russia).
The emergence of Uzbekistan (and other post-Soviet countries) as a transit point is associated with the complication of traditional supply chains through China. Industry representatives in a conversation with The Insider noted that recently the transit or re-export through China of dual-use goods (or goods under embargo) made in Europe or the USA, or the export from China of such goods made using European or American technologies, has encountered obstacles. Thus, when one Russian businessman tried to buy an Arria 10 FPGA on Alibaba (the price is from hundreds to thousands of US dollars per chip), the seller on AliExpress directly answered him: "We can only do it illegally." According to market experts, such goods are transported "in TVs or microwaves," using old-fashioned smuggling methods.
According to market experts, FPGAs are transported "in TVs or microwaves," using old-fashioned smuggling methods
When another Russian buyer tried to pay through a Chinese bank for completely legal (both in Russia, China and the USA) goods not related to military technology in yuan, eight out of 10 banks refused. Banks are afraid of secondary sanctions. Another businessman who tried to buy goods in China for a large Russian state corporation was told by the Chinese: "Come pick them up in person, bring the money in suitcases." With this scheme, all the risks of transporting the cargo through customs fall on the Russians.
Reaction of exporters and manufacturers
The Insider tried to contact the manufacturer and official exporter to Uzbekistan of boards with integrated Xilinx FPGAs — Hitech Global. At the time of publication of this material, there was no response. It is known from American public registers that Hitech Global's affiliates are Samantha Alimardani, Cyrus Mousavi, and Sayed Mousavi.
One of the major exporters of FPGAs to Russia (and an important partner of AMD's former distributor, Inline Group), the Hong Kong-based Arcbase Electronics, acknowledged in its response to The Insider that it continues to supply Xilinx products to Russia. The company also noted that it still has a "Russia manager" named Dmitry Pushkin.
In response to The Insider's request, AMD reported: "AMD suspended all sales and technical support for AMD and Xilinx products in Russia and in all sanctioned regions immediately after the invasion of Ukraine. We strive to fully comply with all US and international export regulations and have a clear policy requiring our distributors and customers to do the same."
At the same time, AMD did not explain at what stage of the distribution chain the exporting companies were that directly imported the goods to Russia, and how the FPGAs and boards containing them ended up in their hands. AMD also did not explain what happened with the in-person Know Your Customer procedure.
Experts in the field of electronics distribution explained to The Insider that the only point at which a violation of sanctions legislation can be stopped is the sale of goods by a general or national distributor. The manufacturing corporation will not be able to exercise any further control. As long as the "large" distributor takes the word of the buyers (that is, without a personal visit to the production facility and verification that the circuits are installed in the declared equipment - for example, a university computer for calculating Dedekind numbers), violations of the law will continue.
Therefore, the responsibility for tracking each chip of this class lies precisely with the manufacturing corporation and its distributors. Of course, it is impossible to check the fate of cheap chips for $10 each. However, experts assure that it is quite possible to establish the localization and check the use of chips for $100 thousand.
Microcircuits produced by American companies have repeatedly been found in missiles, drones and military aircraft that bomb Ukrainian cities. Among them are chips that are considered dual-use goods in international documents. This means that they can be used or are even most often used in military equipment and technologies or in surveillance technologies. These types of devices include programmable logic integrated circuits. The navigation system of the X-101 missile, which Russia launched at the Okhmatdit Children's Hospital in Kiev in July 2024, used Xilinx integrated circuits (manufactured by AMD). Similar, but more advanced chips are also in the Lancet UAV. Xilinx and Altera crystals (manufactured by Intel) are used in the navigation of Iskander and Kalibr missiles. FPGAs, which are used in military technologies, continue to be imported to Russia, despite all sorts of sanctions, trade embargoes and restrictions.
Not a single FPGA to the Russian military (on paper)
It cannot be said that American companies only had to worry about their products being used in Russian weapons in 2022. Sending a high-performance FPGA from an American factory to Russia has never been easy — in theory. Back in 2020, the US Department of Commerce tightened controls on exports to Russia, China, and Venezuela.
FPGAs with performance above a certain (not very high) threshold were added to the list of dual-use goods, requiring mandatory licenses for export to Russia for military purposes (and they were denied by default).
Thus, FPGAs were effectively banned from being supplied to buyers associated with the military-industrial sphere, or "military end users" (meaning not only the military itself, but also intelligence agencies and security forces).
These restrictions were supposed to deprive manufacturers of weapons and surveillance technologies in Russia (as well as in China and Venezuela) of access to American developments. At the same time, suppliers are obliged, according to American law, to control who is the end user of their chips and not allow them to be reused by companies that produce military equipment or surveillance equipment. For this purpose, the Know Your Customer procedure was envisaged - a check of purchasing companies, including in person - by special commissions of manufacturing companies to ensure that FPGAs do not end up in Russia for military use.
Suppliers are obliged, according to American law, to control who is the end user of their chips
Even manufacturers of mass-market encryption devices lost access to FPGAs produced by AMD and Intel (both companies are registered in the USA, and Intel's physical production is mainly located in the States). Lawyers at Miller & Chevalier, a major law firm that advises companies on export control issues, issued a warning to their clients that this clarification in the legislation made it difficult for even developers of telecom and testing equipment to obtain an export license.
After Russia's invasion of Ukraine in 2022, Intel and AMD announced their withdrawal from Russia. That same year, an additional trade embargo was introduced on supplies from the United States to Russia, which included microcircuits. Unlike the bans on the export of dual-use goods, this embargo does not depend on the end user or the final purpose of use. It also does not depend on the parameters of the microcircuits. That is, since 2022, it does not matter who, for what purpose and what kind of FPGA is sent to Russia - all this is prohibited.
Since 2022, it does not matter who, for what purpose and what kind of FPGA is sent to Russia. All this is prohibited
However, the supply of microcircuits continued, as The Insider has already reported. In the two years since the war began, at least $216 million worth of Xilinx products have been shipped to Russia, while $120 million worth of Altera products have been shipped to Russia.
According to customs data, AMD and Intel have been turning a blind eye to the export of Xilinx and Altera chips to Russia for years, which have no domestic application. Transactions between Russian buyers and numerous intermediary firms that could not have the right to resell these chips to Russia suggest that instead of in-person control over the end user, the manufacturers could, at best, get away with worthless papers.
The Insider has found out how export control procedures have failed to prevent technology corporations from remaining in the service of the Russian military-industrial complex.
The Russian defense industry really needs FPGAs, but they don’t know how to make them — and they successfully buy them
Programmable logic devices themselves are not a military technology. FPGAs are needed where performance is important, not mass production. FPGA sales are growing rapidly worldwide, primarily due to demand for computing power in data centers and artificial intelligence and telecommunications (for example, they are in high demand among mobile operators - many mobile base stations have such chips). These devices are used where large amounts of data need to be processed very quickly, so one of the promising applications of FPGAs is computer vision and video object recognition systems based on it.
A device using FPGA will not have the versatility of a regular computer (which can play music, solve differential equations, and compare texts), but a specific task that requires a large number of identical calculations simultaneously (for example, face recognition, content filtering on the Internet, or automated trading) can be solved with stunning efficiency.
In Russia, such devices are practically not produced. The Mikron plant, which proudly calls itself the "heart of Russian high-tech", has only two FPGA models in its range. Its competitor, the Voronezh Semiconductor Devices Plant, produces three models of such microcircuits. The declared characteristics roughly correspond to the simplest FPGAs of their main global competitors - Xilinx and Altera. Xilinx was the undisputed leader on the Russian market. This company produces microcircuits that can contain millions of logic cells - Mikron cannot boast of this.
The Russian military and space industry needs powerful FPGAs, so companies are buying American products despite all the restrictions and export control rules — even in 2024. Naturally, it is not manufacturers associated with the military-industrial complex who are engaged in the purchases, but ordinary distribution companies.
FPGAs in Russia: radar, internet censorship and facial recognition
FPGAs are used not only in missiles and drones. Very often, such chips are used in radar technologies — primarily military ones. This is evidenced by the data on the purchase of Xilinx chips by Russian enterprises and design bureaus, and the data on patents and applications for inventions that can be found in the Rospatent database. Vacancies for FPGA programmers are posted by Russian defense and space enterprises — and most often, the brands mentioned are Xilinx and Altera. Xilinx chips are in the Angara launch vehicles and installations for measuring radio signals.
Xilinx FPGAs are also used in the hardware systems for encryption and protection of information "Continent" and "Sobol", which are produced by the company "Security Code". Despite the fact that the company has long been under US sanctions, it is working on new software and hardware systems using the most advanced American microcircuits. Subsequently, such systems are used, for example, in Internet filtering technologies, as The Insider has already reported. However, "Security Code" complained back in 2022 about the lack of imported components for its firewalls - devices that filter traffic. The same problems with imported electronics were experienced by the company UserGate, which also produces systems for filtering traffic.
Government procurement data confirms the ongoing supply of components to Russian defense industry enterprises. For example, sanctions did not prevent the Ural Optical and Mechanical Plant from purchasing and using Xilinx microcircuits. Although the enterprise also produces civilian products, it is primarily a supplier of optical-electronic systems for the Russian army. The boards of the American manufacturer, worth tens of thousands of dollars, were also purchased by the Orion Scientific and Technical Center, which produces hardware and software for the FSB. Also, after the introduction of restrictions, high-performance microcircuits were supplied to TsKBA, an enterprise that produces navigation systems for Russian military missiles. Another promising application of FPGAs is video surveillance systems with facial recognition, The Insider's sources say. We are talking about the most advanced microcircuits such as the Xilinx Ultrascale+ series. Until 2022, the company even promoted similar solutions on the Russian market. Using specialized expensive hardware, video streams from all cameras are processed every second to single out people's faces from the crowd and compare them with databases.
One of the promising applications of FPGAs is video surveillance systems with face recognition
Deep filtering of the Internet (what allows censors to recognize and block VPNs or specific applications, such as YouTube or Telegram) is most effective when implemented on FPGAs.
FPGAs are also critical for solving certain mathematical problems, such as finding Dedekind numbers. Calculating the eighth Dedekind number on a regular laptop takes eight minutes, but calculating the ninth would take several hundred thousand years. However, using a supercomputer on FPGAs, the problem was solved in five months. This is a very nice result, but it is unlikely that anyone in modern Russia is investing money in finding Dedekind numbers. How export controls and trade embargoes (don't) work
A foreign company that has no connection to Russia or military technologies told The Insider about how the sale of complex and expensive microcircuits is organized. For its equipment, it needed high-performance FPGAs from Altera, costing from $4,000 per piece. Sometimes the company ordered one or two microcircuits, sometimes a hundred at once. Even when buying several FPGAs, a commission of two or three people came to the buyer, which carried out a very thorough check - the same Know Your Customer procedure.
The manufacturer also requires a letter from the buyer indicating who the final recipient of the product is (however, many provide false information in such letters, which is why in-person checks are required). And to export goods from the United States, a special license will be required.
The inspectors insist that the import of supplied chips in "naked" form is completely prohibited in Russia, as well as as part of the equipment that is transferred to the Russian side along with the technology and rights to use. However, if any equipment is imported into Russia, the rights to which will not be transferred to a Russian person (like, say, you import your personal laptop into Russia, and it does not become the property of the government), and this person is not given access to the technology on which the FPGA works, then such deliveries may “go unscathed.”
Suppliers of equipment and electronics for the Russian defense industry have long since figured out that it is often enough to indicate a company in the EU or China as the final recipient, and American manufacturers will be ready to ship the goods. This “gray scheme” worked especially well before Russia’s full-scale invasion of Ukraine in 2022. For example, from at least 2000 to 2014, Pavel Flider, an emigrant naturalized in the United States, purchased dual-use electronics from American companies, including Xilinx FPGAs, and sold them to Russia through European “shell” companies. His company’s activities have repeatedly attracted the attention of regulators, but almost always they were satisfied with Flider’s explanation that his goods are not supplied to Russia. In reality, the recipients of the chips were Russian defense companies, which became known after Flider was detained and his home in San Francisco was searched in 2015. Flider eventually made a deal with the investigation, turned in other participants in the chip smuggling scheme to the US authorities, and got off with a large fine.
Suppliers of equipment and electronics for the Russian defense industry have long since figured out that it is often enough to indicate a company in the EU or China as the final recipient, and American manufacturers will be ready to send the goods
Flider is one of the few people caught illegally exporting electronics to Russia over the past 20 years (examples - one, two, three). The schemes uncovered by the FBI are usually similar to the one used by the convicted businessman. Apparently, this is how expensive microcircuits ended up in Russia, including to end up in missiles flying to Ukrainian cities.
How American FPGAs are supplied to Russia
Supplies of FPGAs and finished products with them often occur according to a scheme that has been tested many times in all sectors of the economy. Before the full-scale invasion of Ukraine, legal supplies were made through distribution companies. With the start of the war, they lost this status. Then foreign manufacturers seemed to have stopped doing business in Russia. But persons affiliated with the previous official suppliers — former owners, directors, employees, using their established connections in the market, opened new legal entities and launched exports through them.
For example, in 2018, the official distributor of Xilinx in Russia was OOO Makro Group. Inline Group also dealt with deliveries. Now in Russia, it is offered to buy Xilinx FPGAs through websites that are very similar to each other in design and content: fpga.su (owned by a certain Stanislav Bolt, associated with a number of companies, the most notable of which is Spetspostavka), plis2.ru (owned by Inline Group) and xilinxonline.ru (owned by OOO Snabinter).
These websites attract buyers with headlines like “Official distributor of Xilinx in Russia” or “Wholesale deliveries of scarce electronic components from the USA”. Although, of course, AMD cannot have any “official distributors” in Russia. However, the affiliation of some companies with former “officials” suggests that the connections of old distributors continue to work in this market. And AMD still (August 2024) mentions the address and phone number of its Moscow office on its website.
Retail companies that sell a wide range of electronic components from different companies also announce the sale of FPGAs in Russia. A diverse range of products with such boards is presented, for example, in the Robotics Shop robotics store and the Fregat components store.
Can we be sure that illegal FPGA supply channels continue to operate to this day? Apparently, yes. For example, the sanctioned company T-Component SP posts “special offers” for the supply of Xilinx FPGAs.
The sanctioned company T-Component SP posts “special offers” for the supply of Xilinx FPGAs
At the same time, T-Component posts photos of the chips on its website against the background of its proprietary substrate — apparently to confirm its ability to import the necessary goods to Russia. These images are in the section “The latest deliveries of Xilinx chips from T-Component”.
At the same time, the diagrams do not erase the batch numbers and other designations that would allow the manufacturing corporation to identify through which specific distributor this product came to Russia. The Insider sent AMD a request indicating the address of the page with photos of the product, but there was no response at the time of publication of this material. According to customs data, chips with markings corresponding to those indicated in the drawings were indeed imported to Russia, but in no case is T-Component SP listed as an importer.
This indicates, among other things, a certain futility of attempts to influence importing companies. It costs about $300 to create or close an LLC in Russia. This is less than the cost of an hour of a lawyer's work in Washington. At the same time, completely different companies can be engaged in actual deliveries.
Significant volumes of Xilinx top FPGAs (including those already built into boards) were delivered to Russia by the company ID Solution. It is associated with the company Merusoft, which deals with facial recognition technologies. ID Solution's purchases indicate that this company may be engaged in some kind of powerful parallel computing. The products they order allow for the assembly of a supercomputer, among other things. On the other hand, judging by the ID Solution website, it is engaged in the retail sale of FPGA to other consumers. Until now, it was believed that ID Solution was an intermediary in the purchase of drone components by Russian companies. Drones are equipped with microcircuits that can cost hundreds, but not tens of thousands of US dollars.
ID Solution, in particular, imported ready-made boards containing the latest FPGA matrices from Xilinx. The boards were manufactured by the American company Hitech Global.
In February 2023, ID Solution brought HTG-840 VIRTEX ULTRASCALE debug boards to Russia via Uzbekistan, containing the XCVU19P-1FSVB3824E FPGA, which costs more than $80,000. This is the most productive generation of programmable logic integrated circuits available on the market - Virtex UltraScale+, which was just released in 2023. This chip has 8,938,000 logic cells. For comparison: the above-mentioned XC2V1000TM circuit from the X-101 missile has only 11,520 cells - that is, about a thousand times less, and it costs about a thousand times less. ID Solution and Macro Group were the official distributors of Hitech Global in Russia. In 2014, Dmitry Veleslavov, Chairman of the Board of Directors of Macro Group, said in an interview with a specialized publication: “After the third wave of sanctions, we were faced with a ban on the supply of all new Xilinx families to Russia that fall under the “dual-use” category, including for civilian projects.” Thus, these companies could not have been unaware that they were violating sanctions legislation.
Judging by the customs declarations, in some cases the cargo was apparently not even repackaged in Tashkent, but immediately sent to Russia (the declarations indicate the same weight of goods on the way from the USA to Uzbekistan and from Uzbekistan to Russia).
The emergence of Uzbekistan (and other post-Soviet countries) as a transit point is associated with the complication of traditional supply chains through China. Industry representatives in a conversation with The Insider noted that recently the transit or re-export through China of dual-use goods (or goods under embargo) made in Europe or the USA, or the export from China of such goods made using European or American technologies, has encountered obstacles. Thus, when one Russian businessman tried to buy an Arria 10 FPGA on Alibaba (the price is from hundreds to thousands of US dollars per chip), the seller on AliExpress directly answered him: "We can only do it illegally." According to market experts, such goods are transported "in TVs or microwaves," using old-fashioned smuggling methods.
According to market experts, FPGAs are transported "in TVs or microwaves," using old-fashioned smuggling methods
When another Russian buyer tried to pay through a Chinese bank for completely legal (both in Russia, China and the USA) goods not related to military technology in yuan, eight out of 10 banks refused. Banks are afraid of secondary sanctions. Another businessman who tried to buy goods in China for a large Russian state corporation was told by the Chinese: "Come pick them up in person, bring the money in suitcases." With this scheme, all the risks of transporting the cargo through customs fall on the Russians.
Reaction of exporters and manufacturers
The Insider tried to contact the manufacturer and official exporter to Uzbekistan of boards with integrated Xilinx FPGAs — Hitech Global. At the time of publication of this material, there was no response. It is known from American public registers that Hitech Global's affiliates are Samantha Alimardani, Cyrus Mousavi, and Sayed Mousavi.
One of the major exporters of FPGAs to Russia (and an important partner of AMD's former distributor, Inline Group), the Hong Kong-based Arcbase Electronics, acknowledged in its response to The Insider that it continues to supply Xilinx products to Russia. The company also noted that it still has a "Russia manager" named Dmitry Pushkin.
In response to The Insider's request, AMD reported: "AMD suspended all sales and technical support for AMD and Xilinx products in Russia and in all sanctioned regions immediately after the invasion of Ukraine. We strive to fully comply with all US and international export regulations and have a clear policy requiring our distributors and customers to do the same."
At the same time, AMD did not explain at what stage of the distribution chain the exporting companies were that directly imported the goods to Russia, and how the FPGAs and boards containing them ended up in their hands. AMD also did not explain what happened with the in-person Know Your Customer procedure.
Experts in the field of electronics distribution explained to The Insider that the only point at which a violation of sanctions legislation can be stopped is the sale of goods by a general or national distributor. The manufacturing corporation will not be able to exercise any further control. As long as the "large" distributor takes the word of the buyers (that is, without a personal visit to the production facility and verification that the circuits are installed in the declared equipment - for example, a university computer for calculating Dedekind numbers), violations of the law will continue.
Therefore, the responsibility for tracking each chip of this class lies precisely with the manufacturing corporation and its distributors. Of course, it is impossible to check the fate of cheap chips for $10 each. However, experts assure that it is quite possible to establish the localization and check the use of chips for $100 thousand.
