Intel suspends all operations in Russia weeks after halting chip shipments

Some 1,200 of chipmaker's employees based in Russia, a country accounting for 0.1% of global chip sales in 2021

Intel is temporarily halting all business operations in Russia following the decision a little more than a month ago to pause sales to both Russia and its puppet state Belarus.

Days after Russian troops marched into Ukraine and the conflict began, the chipmaker said it was complying with applicable export regulations and sanctions against the country – though US sanctions only initially pertained to the supply of semiconductors for military applications or dual purpose uses.

A broader decision was taken by Intel in early March when it paused all sales. Now it is going a step further. In a statement, Intel said:

"Intel continues to join the global community in condemning Russia's war against Ukraine and calling for a swift return to peace. Effective immediately, we have suspended all business operations in Russia.

"Our thoughts are with everyone who has been impacted by this war, particularly the people of Ukraine and the surrounding countries and all those around the world with family, friends and loved ones in the region.

"We are working to support all of our employees through this difficult situational including our 1,200 employees in Russia. We have also implemented business continuity measures to minimize disruption to our global operations," Intel added.

Intel does not detail in its annual reports the volume of sales it generates in Russia, although the Semiconductor Industry Association said Russia accounted for just 0.1 percent of global chip purchases in 2021, and represented $50.3 billion of the $4.47 trillion spent globally on tech.

Arch-rival AMD also stopped chip sales in Russia at the end of February. "Based on sanctions placed on Russia by the United States and other nations, at this time AMD is suspending its sales and distribution of our products into Russia and Belarus," it said at the time.

We have asked AMD if it too will freeze all business operations in Russia but the company was not immediately available to reply.

The US sanctions imposed days after Russia's invasion of Ukraine also affect other chipmakers including Micron, SK Hynix and Samsung, as well as storage suppliers Commvault and Pure Storage.

Russia's semiconductor market is not built to take the strain of reduced supply: it is relatively underdeveloped, and contract manufacturer TSMC recently compounded the situation by confirming it would not be building chips for Russian clients.

Large swathes of the IT industry in Europe and North America have responded to the war in Ukraine with condemnation and by pulling out of Russia, including IBM, HP, Dell, Microsoft and more. We previously asked PC brands Lenovo, Asus and Acer if they plan to follow suit.

Lenovo's UK PR man told us he'd "try to get a response when I can." This was on 10 March and still no further reply. Asus didn't respond at all. And Acer told us: "Our priority is the safety of our local employees and their family. We are closely monitoring the situation, and will strictly adhere to all applicable trade regulations."

Very few tech companies have estimated the financial impact of exiting the country but Adobe put the figure at $75m for this current fiscal year.

UiPath said that for it, the damage would be closer to $15m.

We are told to expect a long-tail of cyber retaliation from Russian leader Vladimir Putin over the use of sanctions: early activity has included modem-wiping malware targeting Viasat, and credentials thieves targeting NATO and Eastern European military.

The Russian president has now banned the purchase of foreign software used in critical infrastructures projects. ®

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