Is Russia Really Buying Home Appliances To Harvest Computer Chips For Ukraine

Parts of unmanned aerial vehicles, Orlan-10, Granat-3 , Shahed-136, Eleron-3-SV, used by the Russia ... [+] against Ukraine, are seen during a media briefing of the Security and Defense Forces of Ukraine in Kyiv, Ukraine on 15 December 2022, amid Russian invasion of Ukraine. (Photo by STR/NurPhoto via Getty Images)

After Commerce Secretary Gina Raimondo said in congressional hearings last spring that Russia had been harvesting semiconductors from dishwashers and refrigerators for its military equipment, the story made the rounds in the press. But there's little evidence it's a widespread practice.

The story popped up again last fall after data compiled by Bloomberg from the EU's Eurostat database reportedly showed a spike in European exports of washing machines, refrigerators and even electric breast pumps to countries neighboring Russia like Armenia. Data showed the small country imported more washing machines from the European Union during the first eight months of 2022 than in the previous two years combined.

Secretary Raimondo cited anecdotes from the Ukrainian prime minister that some of the Russian equipment left behind contains semiconductors from kitchen appliances while European officials have reportedly expressed concern about the final destination of appliance/electronics exports to Russia's periphery.

One eyebrow-raising example pointed to by European officials was data indicating that that EU exports of electric breast pumps to Armenia nearly tripled in the first half of 2022 despite a 4.3% drop in the Armenian birth rate. Demand for breast pumps in Kazakhstan reportedly shot up 633% in the first half of 2022 while its national birth rate fell 8.4% during the same period.

The figures and the claim that Russia may be harvesting semiconductors it cannot source elsewhere from home appliances makes for a tale that reflects well on U.S./EU sanctions and the policy-makers who have promulgated them. In September for example, European Commission President, Ursula von der Leyen's comments that Russia's industry is "in tatters" and its economy on "life-support," as evidenced by its stripping of chips from dishwashers and refrigerators, were tweeted by the European Commission.

The EU tweeted comments from Ursula von der Leyen on Russia's purported use of semiconductors ... [+] scavenged from consumer electronics.

But is this really happening in any meaningful way?

"The scale of this is unclear," says Chris Miller, a Fellow with American Enterprise Institute (AEI) thinktank, specializing in Russian affairs and semiconductors. "My feeling is that most of the chips that Russia is accessing today for integrating into military systems are not coming via this route."

Miller adds that the type of microchips found in dishwashers, refrigerators and the like are simple microcontrollers - easy to find anywhere and hard to control the distribution of - which tend to enable simple, single tasks within larger systems. They are not key to the full functionality of the devices they go into.

"Many weapons systems have hundreds of chips inside of them," he says. "Some are key to managing communications or sensors and some do really simple mechanical tasks. The [U.S.] Commerce Department is a lot more focused on sophisticated chips, not simpler less capable chips."

Miller agrees that Russia has faced difficulties sourcing different kinds of semiconductors at different points in the Ukraine war but, "We should probably assume that Russia is going to find ways to get access to lower tech chips simply because they’re widely available. When it comes to higher tech stuff, it's harder to get good information on whether Russia is actually facing shortages."

However, the Ukrainians themselves have recently supplied information and examples showing that Russia does not likely need to cannibalize consumer electronics for microchips. Captured Russian drones of the type recently used to bombard Ukraine's power-generation infrastructure and other targets like the Orlan 10 reveal microchips inside from Swiss, Mexican and U.S. manufacturers.

In the Orlan 10, a widely used Russian drone in Ukraine, the chips are being used to plug into Russia's GLONASS navigation system (the equivalent of GPS) for spatial orientation and navigation. They’ve been found in Russian-modified Iranian drones as well.

These kinds of chips have long been widely available to civilian users on the global market and Ukrainian authorities say at least six U.S. companies produce GLONASS-compatible chips. Despite the suspension of ties between these European and North American chip makers and Russian clients as well as corporate policies prohibiting sales of the chips to Russia, they’re making their way to the country through distributors in third-party countries.

Denys Hutyk, an analyst with the Economic Security Council of Ukraine, told CBS News that, "Microchips manufactured by those American companies and other European companies are going indirectly to Russia through China, through Malaysia, and other third countries."

"If you think about GPS microchips, there was a time when GPS a rare feature but now GPS is in all sorts of electronic devices," AEI's Miller says. "There are lots of GPS chips floating around the world. They have distributors that Russia's going to have a fair amount of capability to tap."

Cutting Russia off from breast pumps or dishwashers isn't the real U.S. policy goal in any case Miller adds. "Causing uncertainty in Russia's defense industrial supply chain is successful even if it's not airtight. Even if our [chip export] controls are only throwing a wrench in the process, that's a win."

Reports that Russia may be culling high end coffee makers for chips flatter Western policymakers’ sanctions actions, Miller agrees. But he cautions that, "We’re still awaiting good data on the real impact of these export controls. Trying to measure their disruption of the Russian defense industry - which is always opaque - is going to take some time."

There are indications in the Russian media Miller notes that the share of counterfeit chips that its defense establishment is purchasing have gone up over the past year. Counterfeit semiconductors do not tend to make for efficient weapons systems so such anecdotal evidence may be of importance.

But there are other facets of the whole toaster-to-drone microchip tale that Miller says shouldn't be ignored.

Is this high-tech refrigerator a source of chips for Russian drones in Ukraine? It's possible, but ... [+] not the factor that the media may have trumpeted.

"On the [reports] of increased [appliances] exports to Russia, I’d caution that there was a western-operated dishwasher or washing machine factory in Russia that shut down when western firms pulled out of the country in the Spring of 2022. It could be that increased consumer goods imports into Russia are happening because domestic production has declined."

In other words, demand for consumer electronics products in Russia may be coming from Russian consumers rather than the Kremlin. It's another reminder that, as with all things connected to the Ukraine conflict, we shouldn't buy everything we hear.