Russia's semiconductor industry lags behind global peers. Image: Twitter

In 1962, two Americans who spied for Russia and defected, Alfred Sarant and Joel Barr, proposed to turn the new Russian city of Zelenograd (“green city”) into a microelectronics and computer development and manufacturing center. 

Zelenograd thus became the heart and soul of Russia’s effort to build modern electronics for its military. But it soon failed in its mission and the legacy of failure continues to this day.

Sarant and Barr, engineers who worked on classified US defense projects, mainly involving radar, had been part of the Rosenberg spy ring in the United States. Someone tipped them off that the arrests of Julius and Ethel Rosenberg were imminent.

Around the same time, British scientist and spy Klaus Fuchs was arrested in the United Kingdom. During World War II, he played a major scientific role at the US nuclear bomb-making site in Los Alamos.

Nikita Khrushchev took up Sarant and Barr’s proposal and turned Zelenograd into the heart of Soviet efforts to catch up with the US in electronics, including small computers and integrated circuits. Barr, who was a brilliant engineer, designed the first digital computers for Russia’s nuclear submarines and spearheaded the drive to build integrated circuits.

During the 1980s, the US launched a program of export controls and law enforcement efforts against Russian-backed “techno-bandits” who were supplying Russia with sophisticated equipment for their new electronics industry. Russian spying also went into high gear, going after US semiconductor designs needed to make Russian weapons more capable and “smart.”

There is a huge contrast in how the US dealt with Russia and its other emerging strategic rival, China. Russian development was stymied by strong controls while the US openly aided China in developing its now huge electronics industry.  

One of the reasons Russian equipment destroyed in the Ukraine war is chock full of microchips made in the US, Europe and Asia is the plain fact that Russia cannot make them on its own. The export controls of the 1980s set the stage for Russia’s great microelectronics failure, which continues to afflict Zelenograd even today.

Russia’s two important semiconductor companies, Mikron and Angstrem, are located in Zelenograd. Angstrem was last reported in bankruptcy and there are also legal claims against former directors of its Angstrem-T division concerning “missing” equipment.

Mikron, the last great semiconductor hope for Russia, is working to develop technology that is already more than 2o years old, perhaps as out of date as 30 years. But the company is promising, not delivering. 

Russia’s Micron is dire need of investment. Image: Twitter / DigitNews

It badly needs investments for a new foundry and for etching and laser equipment. Whether it will get the needed funding, or even if it could develop the requisite skill base, are open questions.

Bottom line: Russia cannot be a first-rate power without a capable electronics sector.

A good example is the lack of modern equipment in its aircraft and ground equipment.  Russian tanks are operating without active protection systems, making them vulnerable to relatively cheap anti-tank weapons in Ukraine. Russian aircraft are flying without GPS mapping systems and some of them even lack ground targeting systems.

To be sure, these shortcomings do not mean that Russia will lose its war in Ukraine. However, Russia’s indigenous deficiencies in advanced electronics certainly does mean that it is suffering huge losses in equipment and manpower.  

Russia’s high-tech industry is mostly focused on military requirements. That is far different from the US, China, South Korea, Japan, Taiwan or European producers, all of which have strong commercial sectors.  

In the 1980s, the Pentagon wanted very high-speed integrated circuits. The Department of Defense thus started the Very High-Speed Integrated Circuit program (VHSIC) and invested in excess of $2 billion in the effort (about $5.5 billion in 2022 dollars). 

It never succeeded in making any VHSIC integrated circuits, mostly because commercial processors far outperformed what the Pentagon aimed at producing. However, it did manage to subsidize US semiconductor equipment manufacturing, stimulating an industry that shipped much of its product abroad, mainly to Asia. 

The VHSIC program illustrated, if a demonstration was needed, that a competitive commercial sector is vital to progress in electronics, as it is in many other industries.

The Russian approach, on the other hand, was to do everything in secret.  During the Cold War, Zelenograd was a closed city and its work was classified. 

Zelenograd increasingly fell into bad habits, mainly stealing others’ designs rather than developing them indigenously. A prominent example was the “Texas chip,”  an important medium-scale integrated circuit the US was using in its aircraft radars and other hardware in the 1980s. 

When Zelenograd’s engineers pushed for the development of their own home design, they were told by their superiors to copy the Texas chip and drop any independent design work.

Russia’s chips have always been behind the times. Image: Wikipedia

Early on, a second disease infected Zelenograd. Joel Barr was Jewish and he was able to attract a lot of Jewish scientific and engineering talent to Zelenograd, even though it was a classified area where Jews in the USSR had trouble finding employment. 

That was fine with Khrushchev but he was pushed out in 1964, two years after Zelenograd got started. Barr and the Jews were purged by Khrushchev’s successor Leonid Brezhnev, who considered all Jews agents of the West and unreliable. Similar anti-Jewish purges took place in all Russian defense industries and in universities and research organizations.

This was the period where the Soviet Jewry movement gained momentum in Russia, and where Jews and dissidents were demanding, among other things, the right to emigrate. The loss of a large component of Zelenograd’s creative sector, and its leader Barr, represented a significant setback for Moscow’s microelectronics program.

In the 1980s, the US had initially estimated that Russia was within a few years of catching up with it. But as a result of Russian secrecy, purges and a lack of access to Western know-how, Russia slipped irretrievably backward and behind.

By the late 1980s, Russia was seven to 10 years behind the US. Russia’s electronics technology slide was not reversed by the end of the Cold War – in fact, things got considerably worse.

The implications for Russian military power have been huge. Without advanced semiconductors, Russia will lose out on the next generation of smart weapons that will rely on very high-speed intelligent systems powered by artificial intelligence (AI).

AI requires specialized processors built to exacting specifications. China, for example, has just announced it now has a new advanced chip (a MinerVA Bitcoin mining chip) that can potentially compete with even better ones made by the world’s top chip maker, Taiwan Semiconductor Manufacturing Company (TSMC). 

While the Chinese chip is designed for Bitcoin applications, China is working toward advanced AI chips that can process massive amounts of information. China still has a way to go and lacks crucial extreme ultraviolet laser etching equipment, which it is being blocked access to by the US.

Then-Russian Prime Minister Dmitry Medvedev visits a plant of Russian microchip company Angstrem-T in Zelenograd near Moscow in a file photo. Image: Twitter

Russia may already be turning to China at least for lower-grade chips, but there is no evidence China is yet sharing any manufacturing know-how with Zelenograd. China has little to gain in helping Russia since supporting it would potentially result in broader sanctions against China’s electronics industry.

Today, Russia still lacks a credible and relevant domestic commercial electronics industry and is unlikely under current conditions to grow one in the near future. That would require significant foreign investment and access to the global electronics industry. Russia has shut itself out and what it hasn’t done to self-inflict harm, Western sanctions have done the rest.

Back in 1985, Mikhail Gorbachev visited Paris and met with then-president Francois Mitterand. Seeking a relaxation of the Cold War and better relations with the West, Gorbachev told Mitterand that Russia was merely a third-world country with nuclear weapons. Nearly 40 years later, that blunt assessment still rings true.

Follow Stephen Bryen on Twitter at @stevebryen