What companies have not just been represented by the victims of a large and terrible semiconductor shortage. We have already regretted the main automakers, sympathized with some processor developers, worried about the leisure of gamers and not only. There were definitely reasons for that, of course. However, in this whole series of high-profile news with the names of large companies in the headlines, participants in the military-industrial complex (MIC) remained almost unnoticed. Especially Russian.

On the one hand, it is understandable – the participants in this industry, frankly, are not very inclined to communicate with anyone. On the other hand, it is somehow strange to ignore the problems of companies, on whose well-being the security of the state directly depends. And there are problems in the military-industrial complex because of the deficit. Especially in Russia. I will try to talk about them this time. Citing information from several anonymous industry contributors.

An awkward position

I think many people understand that Russian electronics are made using an element base that is not produced in Russia. First of all, this applies to all kinds of processors: logical, analog, graphic … But also a bunch of other irreplaceable trifles are ordered from the outside.

In conditions of a shortage of such trifles, companies from all countries began to miss. A queue began to form in front of the conditional cashier of processor manufacturers. However, from the line of people that usually appears in front of a therapist’s office in a hospital, the seats in this line are distributed according to the importance of clients. The selection criterion is simple: the more a customer is ready to buy components and bring in more money, the faster they will be served.

At the same time, the average Russian electronics manufacturer is negligible relative to most of its foreign counterparts. Accordingly, in the queue in front of the checkout of the component manufacturer, he takes a place somewhere in the tail.

In the case of companies that meet the needs of the army, the situation is even worse. Not only do they make microscopic, by the standards of the market, batch of devices, but also their devices are, on average, more complicated than a kettle or a vacuum cleaner. This means that the nomenclature (the number of components required for production) is many times wider.

Riskуall

Oftentimes, a Russian electronics manufacturer cannot afford to wait weeks or months for components. Especially if the manufacturer has obligations to the state, for failure to fulfill which the supplier faces ruinous penalties. And this does not necessarily only apply to military contractors.

For example, NP GLONASS and IPP ITELMA, one of the main Russian suppliers of automotive electronics, acknowledged problems with the supply of components back in March. At the same time, both companies have obligations to the state. Without the same GLONASS navigation, a Russian-made car will not leave the assembly line – it is prohibited.

In the face of a severe shortage of components, Russian customers begin to turn not only to trusted distributors, but also to brokers. Brokers are, let’s say, unscrupulous hucksters who are ready to get the right products, but tactfully keep silent about their origin. Actually, at this very moment, counterfeit appears on the stage.

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A small remark. To be honest, customers even in peacetime, no, no, yes, they turn to brokers. Because the ruble exchange rate is unstable. From the moment of budget approval to the beginning of procurement, the difference often changes not in favor of the Russian company. At the same time, the company still needs to stay in the budget and buy the planned number of parts. So you have to turn to dubious suppliers with suitable price tags. It’s just that with the advent of deficit, referrals to hucksters for obvious reasons have become more frequent.

Here’s another revealing detail. In an amicable way, any deal with a new supplier should be careful. The correct buyers said that before ordering a large batch, samples are ordered first. They undergo laboratory tests with measuring instruments, and only on the basis of these procedures a decision is made to purchase a large batch. However, this business is not quick. And not all customers have the opportunity to conduct high-quality tests.

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Let’s continue. Anything can be counterfeit. As just an unoriginal part produced by a dubious Chinese fab, as well as an original one, but soldered from the board of a broken device. The latter is not an exaggeration. In the Celestial Empire, in fact, there is a whole garbage industry, the players of which specialize in a kind of recycling of used electronics. At the same time, as representatives of the industry say, it is used spare parts that most often turn out to be Chinese counterfeit.

The main criterion by which the components are selected in this case is a functional test. If the product passes it, then it can be sold. The further fate of the broker does not care.

Hidden threat

Of course, brokers pose the greatest threat when customers from the military-industrial complex turn to them. Because the unpredictable behavior of a counterfeit chip at the most crucial moment can lead to the most unpleasant consequences in the army. At the same time, it is the companies from the military-industrial complex that are now more at risk of running into brokers than others. After all, let me remind you that they have a large nomenclature of components, and orders in quantitative terms are small. That is, with all the desire, it is impossible to cover all positions with proven distributors in a crisis.

It should be noted here that the Russian military-industrial complex is no exception. The armies of all countries suffer from their specificity. In the same USA, for example, there is a special state program to identify counterfeit electronic products. Their practice shows that most of the low-quality components seep into the aviation industry.

Industry Week estimates that by the end of 2019, the market for counterfeit semiconductor products reached $ 75 billion.At the same time, all these components were integrated into devices worth $ 169 billion.Old reports show that about 15% of spare and replacement electronic components that are purchased US Department of Defense are counterfeit products.

I have not found similar statistics for Russia. And I’m not sure that it exists in principle. However, market participants say that the Russian army is already dealing with the problem of non-original products. Moreover, the standard for combating counterfeiting seems to be lapped up from the American one. And the implementation of this standard in Russia is most likely carried out by institutes subordinate to the Ministry of Defense and the Ministry of Industry and Trade, such as the Mytishchi Research Institute of Radio Measuring Devices.

The rest of the economy will soon be under control as well. In February of this year, Russian Prime Minister Mikhail Mishustin approved the Strategy to Combat Illicit Trafficking in Industrial Products until 2025, in which many points are devoted to the fight against counterfeiting in the electronics industry. The development of the methodology was entrusted to the Ministry of Industry and Trade.

However, the same sources note that in the case of the army, catching counterfeit goods is half the trouble. Since the military is aware of their responsibility and the devices are tested before being used in the field. At this stage, most of the marriage is caught. However, the very fact of catching a low-quality product adds a lot of trouble. After all, then you have to order a new microcircuit, rebuild the device and test it again.

We all will die?

What could be the way out of this story? Yes, military contractors are now experiencing problems, no less (if not more) than other players in the microelectronics market. Yes, the use of counterfeit products in the military-industrial complex can have big consequences. And no, they are not worthy of a headline like “A meteorite flies to Earth – we will all die.” Counterfeit products will not reach the control panels in the launching shafts.

The producers themselves admit that the biggest problem of the military-industrial complex in the conditions of shortage is delays. The release of a number of devices will be delayed. Fines and penalties will go. Someone will lose their position. And how critical is all this from the point of view of national security? It is already necessary to involve military analysts here.

In the end, it seems to me that the main thing in this story is that the government paid attention to the problem. Indeed, in fact, counterfeit in the military-industrial complex is a hundred years old at lunchtime. It’s just that now the question has become as acute as it has never been before.