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14 Dec 2023

James Byrne,
Denys Karlovskyi,
Gary Somerville, RUSI

Report: In plain sight. Operations of a Russian microelectronics dynasty

In plain sight. Operations of a Russian microelectronics dynasty, 14 December 2023

...Following the Kremlin’s invasion of Ukraine in February 2022, Russia’s microelectronics imports entered the crosshairs of regulators after thousands of Western-designed and manufactured components were found inside the country’s weapons platforms. As a result, many of the world’s largest microelectronic component manufacturers – including Analog Devices, Microchip Technology, Murata Manufacturing, Nexperia, NXP Semiconductors, STMicroelectronics and Texas Instruments – terminated sales into Russia, and many also prohibited their distributors from selling into the country. 

Seemingly undeterred, Compel continued importing thousands of shipments of components manufactured by Analog Devices, Microchip Technology, Murata Manufacturing, Nexperia, NXP Semiconductors, STMicroelectronics and Texas Instruments. Compel’s product catalogues seem to have removed a couple of these suppliers, including Texas Instruments, Analog Devices and STMicroelectronics, since the US sanctioned the Russian company...

While the number of suppliers to Compel has dwindled since the 2022 invasion of Ukraine, Germany-based WWSemicon GmbH and Hong Kong-based Finder Technology continued shipping to Compel in 2023 and appear to have become the company’s largest suppliers, accounting for at least 65% of Compel’s imports since 2022.

Russian trade data indicates that before February 2022, Compel’s largest suppliers were WWSemicon GmbH, Finder Technology Ltd and the now-dissolved Compel International Oy, a possible affiliate company of Compel based in Finland. From January 2019 to February 2022, 98% of Compel International Oy and WWSemicon’s exports and 83% of Finder Technology’s exports were destined for Compel and Beliv LLC, another Rudyak company...

As sanctions and export controls have complicated Russian procurement efforts, microelectronics have increasingly been routed through hubs such as Hong Kong. To restrict Russia’s access to critical technologies, the US and UK have sanctioned several Hong Kong companies for supplying Russia’s defence industry...

Finder Technology did not respond when contacted by Nieuwsuur and ARD MONITOR...

While Boris Rudyak told Nieuwsuur that WWSemicon was ‘not part of the Compel network’, he claimed the companies engaged in ‘good business before the war’.  

However, an analysis of trade data, corporate documents, social media and other records indicates that Compel and WWSemicon have maintained exceptionally close ties for nearly 20 years...

While many of Compel’s customers include commercial enterprises, data seen by RUSI, Nieuswsuur and ARD MONITOR reveals that the company has received thousands of payments from dozens of Russian companies sanctioned after the invasion began. Many of these companies have extensive links to the country’s defence industry.

Several companies that were later sanctioned for being part of Russia’s defence industrial base made thousands of payments to Compel from January 2022 to January 2023, including: Testkomplekt LLC...Staut LLC...EuroMicroTech LLC...NIIIT LLC...Specialized Devices and Systems CJSC...EKB Neva LLC...

Complete records of Nieuwsuur’s correspondence with Compel and WWSemicon can be found on Nieuwsuur’s website.