Russian CPUs Double the Price Due to Deficit and Logistics: Report

(Image credit: HP)

Prices of homegrown CPUs designed by Russian companies have doubled due to high demand and complicated logistics, reports Kommersant. It's noteworthy that Baikal Electronics claims that its partners are selling leftovers from their stocks, whereas some local hardware makers imply that the chips are still in production, only their manufacturing has gotten costlier.

The prices on CPUs designed by Baikal Electronics and MCST have increased significantly since the beginning of the year, according to sources in the Russian PC supply chain cited by Kommersant. The price hike occurred due to growing demand for such chips by Russian PC, server, and storage system manufacturers, combined with the relocation of production to new fabs, the report claims.

"Production of Russian chips at foreign fabs has become more complex, leading to extended logistics chains and, consequently, an increase in the cost of the final component," said Sergey Ovchinnikov, chief executive of Norsi-Trans, a producer of servers and storage systems. He also said that the price of homegrown CPUs effectively doubled since the beginning of the year.

After Russia began full scale war against Ukraine on February 24, 2022, leading CPU developers — AMD and Intel — left the country, and Taiwanese authorities banned exports of sophisticated chips made by local foundries to Russia and Belarus. Meanwhile, based on the claims made by the chief exec of Norsi-Trans, it looks like at least one foundry is still producing chips for Russian developers. It's unclear whether that manufacturer is located outside of Taiwan, or if a Taiwanese chipmaker makes chips and supplies them to a third country instead of Russia. There's no confirmation that Baikal's and MCST's chips are indeed produced by any foundry.

But prices of Russian chips have indeed increased. Baikal Electronics's dual-core BE-T1000 P5600 SOC (system-on-chip) based on the MIPS32r5 architecture used to cost 3,990 Rubles back in 2018. Its price remained largely unchanged until this year. The SoC now costs 8900 Rubles at ChipDip store, an increase of 123% since 2018.

A representative for Baikal Electronics told the business daily that this price inflation relates to the sale of older inventory, over which the company has no control. "In such a situation, pricing is entirely at the discretion of the partner and falls under their jurisdiction," the spokesperson for Baikal is reported to have said. MCST refrained from commenting, and the same goes for ChipDip.

Maxim Koposov, chief executive of Promobit (known for PCs, servers, and storage subsystems sold under the Bitblaze brand), reportedly said that all chips by Baikal Electronics and MCST got more expensive recently. He cited increased demand and limited supply as reasons for this, adding that "more and more companies are announcing products based on Russian processors." Meanwhile, most of those systems cannot be produced in mass quantities due to the shortages of chips. As a result, Russian PC and server manufacturers are now relying mostly on grey imports of x86 processors.

"For example, we have released a lineup of products based on x86," said Koposov. "No one wants to work at a loss or breakeven, especially given the possibility of including products based on foreign components in the register of the Ministry of Industry and Trade."

Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.