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In the recent NBC's Face The Nation interview Top Treasury official says U.S. sanctions would target Putin, Russian economy after the 2 minute mark US Deputy Secretary of the Treasury Wally Adeyemo said something about technology that I thought was interesting.

Q: But how effective can US and western sanctions be if Russia is just going to move closer to China, as we're seeing.

Adeyemo: So Margret I was in the Obama administration in 2014 when we took actions against Russian in response to their invasion of Ukraine we've learned a great deal of lessons and what I can tell you is that the actions we would take if Russia were to invade Ukraine this time would be far more significant.

And it's up to President Putin if he wants to become dependent on China going forward, but what I'll tell you is that China can't give Russia what they don't have. There are critical technologies that Russia is dependent on - the United States and our allies on, technologies that China does not have access to.

Question: Which "critical technologies" does Russia dependent upon the United States and its allies for, that "China does not have access to?"

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    I don't know what Adeyemo was talking about but mobile phone tech is one area where western companies hold a lot of the technology and patents - especially if the Russians want to keep their iPhones. Whether you consider that critical depends on your point of view.
    – Stuart F
    Feb 7 at 14:05
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    Leading edge chip production is the main one, though that card has already been played. Even with Huawei knocked down, Chinese dominate global telecom from top to bottom of the tech chain. The most economically impactful tech area would be oil/gas infrastructure and services, but would dramatically boost the rate at which Chinese industrial firms are replicating takeover of global power generation infrastructure market, into oil/gas (classic "disruptive" dynamic per Clayton Christensen). Not to mention the impact of sanctions in this area actually succeeding, which is currently being previewed
    – Pete W
    Feb 7 at 19:41
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    I think it´s important stress out, that it´s just about legal access to "critical technologies". There are still some ilegal ways to get that technologies.
    – convert
    Feb 8 at 12:24

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This refers quite clearly to advanced semiconductors. Axios has an article explaining how the US could make it more difficult for Russia to get semiconductors. The approach is quite simple, as Axios describes it:

As part of Biden's strategy to inflict economic pain on Russia, the administration is threatening to use government regulations to restrict not only chips made by U.S. companies, but chips made by foreign companies that rely on U.S. equipment, tools, software or designs.

Because of the ubiquitous presence of U.S. technology in the chip-making supply chain, the blow to Russia could be staggering.

A spokesperson for the Whitehouse described the technology sanction option in a press call (without mentioning semiconductors explicitly):

In the case of export controls, what we’re talking about are sophisticated technologies that we design and produce that are essential inputs to Russia’s strategic ambitions.

So, you can think of these export controls as trade restrictions in the service of broader U.S. national security interests. We use them to prohibit the export of products from the U.S. to Russia and, potentially, certain foreign-made products that fall under U.S. export regulations.

And given — the reason they work is: If you step back and look at the global dominance of U.S.-origin software, technology, and tooling, the export control options we’re considering alongside our allies and partners would hit Putin’s strategic ambitions to industrialize his economy quite hard. And it would impair areas that are of importance to him, whether it’s in artificial intelligence or quantum computing, or defense, or aerospace, or other key sectors.

In 2021, the Brookings Institute actually wrote an interesting article on Chinese semiconductors entitled Lagging but motivated: The state of China's semiconductor industry. On the US-China relation the article says:

Every year, China imports more than $300 billion of semiconductors, and most, though not all, major American semiconductor companies pull in at least 25% of their sales from the Chinese market.

This mutual dependence has benefitted the technology sectors in both countries. Every major Chinese technology company relies on U.S. chips: Tencent or Alibaba would not be the powerhouses they are today if they had relied on Chinese microprocessors during their formative years or had developed and manufactured their own. Many U.S. companies, meanwhile, have benefited from Chinese customers, markets, and innovations.

I don't know which products would be unavailable to Russia in case of such sanctions. Of course semiconductors are used in a lot of appliances, but which ones rely in some way on US technology and which can be made without, that I don't know. The way I see it though, having to use less advanced technology can set you back quite easily because advances are so rapid. Imagine only having access to technology that has been available for 10 years or more, that's quite restrictive.

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    The US could block semiconductor technology for Russia as long as its allies play along but the phrasing that it is a US dominated industry is just wrong. Looking at wikipedia semiconductor industry, US market share is just 6% with Taiwan the biggest player. It is a very complex and interwoven industry and presumably every semiconductor plant contains some US technology somewhere but that is not the same as a US dominated industry.
    – quarague
    Feb 12 at 17:32
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    @quarague the dominance in the quote refers to tech more broadly. In any case, what matters is that sanctions are enforced. There's no reason they wouldn't be. As a company it's risky to violate those sanctions because that may have consequences when doing business in the US or in other countries which enforce these sanctions. See for example the sanctions currently against China which cover Taiwanese chips.
    – JJJ
    Feb 12 at 18:40
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Ability to design and manufacture the most advanced electronics from scratch is not widespread (source). The most advanced 7 or even 3 nm chips can only be manufactured by three companies — Intel from the U.S., TSMC from Taiwan and Samsung in South Korea. Even these are not fully self-sufficient: ASML from the Netherlands is the only company capable of making a machine that chip manufacturers need to make the most advanced chips. China’s largest chip manufacturer SMIC is still years behind. For instance, Huawei’s chips were manufactured by TSMC, but after the USA applied sanctions, TSMC could no longer make these chips for them. That crippled Huawei smartphone business.

Yes, chips were made in Soviet Union during the times of the Cold War, without help from American technologies. Probably still can be made if nothing is lost in what I am not sure. But the modern smartphone has the power of a 1996 year supercomputer so it will be the difference.

There also other high technology applications like in aircraft engines, for instance. Most of the aircraft used by Russian airlines are manufactured by Boeing and Airbus. Now even China refuses to provide the necessary spares for them. Russians have phased out they home-built fleet, as these were not as good.

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  1. There are no critical technologies that the USA has itself. Most of the components are built in Asia. And the USA may just try to block other countries from selling something to Russia and companies affiliated with it.

  2. There are no military technologies for which Russia strongly depends on another country's chips. Nuclear rockets and EW need very simple chips. But Russia can't produce the electronics needed for MRI scanners. Therefore, sanctions will hit primarily civilian industries.

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    "There are no military technologies for which Russia strongly depends on another country's chips." So Russian fighter jets have no avionics? All military radar and communication is analog?
    – uhoh
    Feb 12 at 22:10
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    @uhoh Russia can build several types of chips. It's not useful for GPUs but acceptable for avionic.
    – GrimCap
    Feb 13 at 18:34
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    I learned something today, thank you! +1
    – uhoh
    Feb 13 at 21:27
  • this Asianometry video has some interesting information.
    – uhoh
    Apr 23 at 2:28

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