SEMI Advances Russia-European Cooperation on Microelectronics

SEMI Advances Russia-European Cooperation on Microelectronics

In December 2010, SEMI Europe hosted and coordinated a delegation of Russian semiconductor leaders in Brussels to discuss greater European Union (EU) cooperation in the development of Russian microelectronics industry. The delegation received widespread press coverage in Russia and Europe and emphasized the critical role that semiconductor manufacturing plays in economic development. After visits with EU representatives and officials, SEMI facilitated visits to IMEC for further discussions on research collaborations and potential joint initiatives.

The semiconductor market in Russia is currently at US$ 1 billion of which over 80 percent is imported. A recent market study by Frost and Sullivan estimated the market potential of almost US$ 10.0 billion by 2015.

Russia benefits from a strong engineering and scientific community, well-funded academic and research programs in nanotechnology, and a financially strong central government focused on high-tech economic development. JSC Mikron is the largest manufacturer of microelectronics in Russia in terms of technological level and volume of production. In 2009, Mikron formed a partnership with the State Corporation RUSNANO and STMicroelectronics Company.

Investment agreement on setting up production facility at Mikron with 90 nm technology level was signed during the visit of Russian Prime Minister, Vladimir Putin to Mikron. The major investor in this project is RUSNANO.

Mikron believes in the huge potential of the Russian market and hopes it will be enabled through the private-state partnership and the policy of localization of manufactures of electronics in Russia. Part of the trade mission to Brussels goal was to help establish an ecosystem or cluster of high-tech companies in Zelenograd, home of Mikron.

In June 2010, Russia president Dmitri Medvedev embarked on a fact-finding and fundraising trip to California’s Silicon Valley in support of high tech infrastructure development in Russia. He reportedly secured around $1 billion in investment, including $100 million from networking equipment business Cisco Systems, for the purposes of advancing Russia’s IT and innovation industries.

In a press conference supporting the delegation, Heinz Kundert, president of SEMI Europe said, “For the industry to be successful, Russia will need to play by the same rules as the rest of the world. This requires open markets for the importation of technology and equipment. The semiconductor industry today is global: there is an established structure, and an integration of players that allows America to buy equipment from Japan and China and vice versa.”

High Tech Clusters in Russia

The development of special economic zones or high-tech clusters are part of an evolving plan by Russia to spur domestic business activity as well as attract foreign investment and infrastructure support for the high-tech industry. In computers and IT, Skolkovo, a small town not far from Russia’s capital, Moscow, is targeted as ‘tech cluster’ that may promise generous tax breaks and financial incentives for companies that set up operations in the region.

To enable an economically viable and competitive semiconductor industry in Russia a supportive legal and regulatory system will be required. According to Heinz Kundert, “If you remove import duties on semiconductor equipment and materials, you will see immediate results.”

In addition to clear restrictions on foreign investment such as, simple infrastructure needs also need addressing. “The main problem for production is the import of spare parts, said Kundert. “The normal practice in semiconductor industry is a scheme in which the spare is delivered in one day because the plant cannot operate. In Russia, today priority shipments are not possible.”

“It is also necessary that the Russian and foreign engineers are able to freely share experiences, and effectively work together at conferences, test facilities and fabs at locations throughout Europe. Current visa restrictions prevent this.”

SEMI is working with Mikron and other Russia companies to overcome these and other barriers to industry development. EU support, research initiatives, and local and national support from Russian governments and institutions are all being addressed. Many of these issues will be at the forefront of planning meeting SEMICON Russia, to be held in Moscow on May 31- June 2, 2011. For more information on the event, see http://www.semiconrussia.org/scrussia-en/index.htm. For more information on SEMI’s involvement in Russia, please contact Carlos Lee at clee@semi.org.

January 6, 2011