Ever since the US and its allies imposed sanctions on Russia following the invasion of Ukraine, Western officials have been frustrated by Moscow’s continued ability to get its hands on American technologies to help power its war efforts. Russian weapons recovered from battlefields in the region are chock full of gear from firms like Intel Corp. and Analog Devices Inc., much to the frustration of officials in Washington, Brussels and Kyiv. The nagging question: Why are trade controls failing?
A cache of records obtained by Bloomberg reveals new details about this surprisingly resilient supply chain from Silicon Valley to Moscow. They show many of the steps that suppliers to Russia’s military take to acquire components from US chipmaker Texas Instruments Inc., unbeknownst to the Dallas-based company. They also identify Russian distributors handling thousands of shipments bound for the country’s military contractors, including several companies under US sanctions. They help produce drones, glide bombs, precision communication systems and the Iskander missiles that Moscow uses to hammer Ukraine’s cities.
The purchasing process is surprisingly simple. Some Russian distributors have integrated information from Texas Instruments’ online shop, TI store, onto their sales platforms, allowing clients to see semiconductor inventory and pricing before they place requests, according to documents seen by Bloomberg and government officials familiar with the matter. From Moscow or St. Petersburg, they can buy TI components with a few mouse clicks, placing orders carried out and delivered through companies outside Russia.
In one case reviewed by Bloomberg, a major Russian distributor handled more than 4,000 orders for hundreds of thousands of TI products worth about $6 million this year through August. Nearly $4 million of those orders were ultimately for Russian military companies, while the remainder were likely for civilian use, according to the supply records. The items were routed through Hong Kong or other countries before arriving in Russia.
The US government has warned the country’s chipmakers they need to do more to keep their technology out of the hands of Russia’s military. At hearings in September, Senator Richard Blumenthal said the companies are “objectively and consciously failing to prevent Russia from benefiting from the use of their technology.” One of four companies that testified, TI came under criticism for “lax controls” of its online sales, according to a report issued at the time.
This chip supply chain shows how a shadowy group of middlemen and shell companies have helped Russia’s military-industrial complex keep buying American technology despite years of war and Western sanctions. These relatively simple chips are central to Russia’s ability to produce weapons.
“Any exports of high-tech chip and microelectronics technology to Russia, either directly or via third parties, carries the attendant risk that this technology could end up being used in weaponry,” said Thomas Withington, an associate fellow at the Royal United Services Institute, a London think tank. “It is imperative that US and allied nations continually monitor their microelectronics exports, particularly to third parties.”
TI said in a statement that it devotes significant time and resources to keeping products out of Russia, and constantly refines its policies and procedures to combat illicit diversion. Every year, on average, TI screens more than 4 million orders and cancels thousands that pose a credible concern, the company said.
“I want to be very clear: TI strongly opposes the use of our chips in Russian military equipment. Any shipments of TI products into Russia are illicit and unauthorized,” Shannon Thompson, the company’s assistant general counsel, said during the Senate Permanent Subcommittee on Investigations hearings in September. “We work hard to prevent the illicit diversion of our parts into Russia. Every level of our company takes this seriously.” The three other companies also said they are trying their best to stop the flow of technology.
This story is based on internal company documents, import and export data collected from multiple sources, and interviews with government officials familiar with Russia’s efforts to buy technology from abroad. Among the documents reviewed by Bloomberg is a sales deck prepared by a leading Russian distributor for its clients. The slides explain to customers how to search and place requests for goods directly on the distributor’s portal, and how they can find up-to-date information such as product availability on the platform.
The starting point for many illicit technology orders are websites, including two called getchips.ru and altchips.ru. Access to the sites is blocked from many Western countries, including in the US and Europe, but Bloomberg confirmed they’re both accessible inside Russia. The portal’s extensive catalog — viewable only after businesses register for access — has millions of products, including goods made by TI, the documents show.
TI provides partners with an API for its online store that allows them to view pricing, inventory, ordering and product information. In some cases, authorized users of the TI API, like some price comparison services, mash that information together with other sources of data and provide their own separate API.
TI said in a statement that it does not provide API connections to any Russian company or website and that, according to its analysis, the two Russian portals do not have direct access to its API. The company said that in order to obtain access to TI’s API, a firm must first pass its screening process. The company prevents any Russian internet address from accessing the TI website or any information directly from the corporation, including through an API connection, the statement added. The company said its product information is widely available on the websites of distributors, aggregators and other companies.
The two Russian portals are replicating content from a Western company’s website that doesn’t appear to have direct access to TI’s API, according to a person familiar with the matter who spoke on condition of anonymity because they are not authorized to disclose confidential information. There seems to be a connection between the three websites, the person said, declining to provide the Western company’s name.
It is not possible to determine definitively how the Russian distributors are pulling the information into their websites, and Bloomberg was unable to independently verify how product information from TI is integrated into the Russian portals. A slide in the Russian sales deck says, without naming TI, that the searchable information is sourced through an API, though orders cannot be made directly via the API and must be placed through a dedicated tab in the portal. Separately, Bloomberg confirmed that TI’s corporate website, TI.com, is accessible from inside Russia by using a VPN, a digital connection that allows to mask location and internet address data.
Bloomberg also obtained and reviewed the Russian distributor’s enterprise resource planning, or ERP, system, a software database that companies use to manage sales, supply chain operations and procurement. The information includes invoices, purchase order numbers and freight tracking data, which details the routes by which products are sent to Russia.
The materials reviewed by Bloomberg indicate that many goods sourced from TI’s store eventually get to Russia from third countries, though they did not reveal each intermediate step in the supply chain or who placed the orders with TI’s shop. That means some orders may have been fulfilled through distributors, resellers or through older stock that was previously ordered and held in storage.
Among the thousands of orders tracked in the internal Russian records, the status of 287 orders is marked as “canceled” suggesting that some customers either changed their mind or the distributor was unable to carry out those orders. The Russian distributor applies a 40% markup across the board to TI’s prices, the documents show. The European government officials said that was to cover and handle the whole delivery and payments process.
TI has a particularly hard time tracking where its chips end up because it sells high volumes of components at relatively low cost, in contrast to chipmakers like Nvidia Corp. or Intel. Distributors can also buy and hold parts for months or even years, raising the possibility that some of the TI chips used by Russia’s military may have been purchased before Western sanctions were imposed.
As Russia invaded Ukraine in February of 2022, the US and European Union introduced export controls on dozens of goods, electronics and technologies, including a detailed list of “high priority items” found in Russian weapons or needed to make them. Many of the TI products that end up in Russia fall under those controls.
Exporting such restricted goods to Russia directly or knowingly is illegal, but shipping to most other countries isn’t explicitly banned. Many deliveries cross multiple jurisdictions before reaching Russia, making checks complicated and the burden of responsibility unclear. Not all the TI components are banned, with some mundane enough they sell for less than a dollar.
US companies need to comply with export control regulations and need to be careful and manage their risk exposure in compliance with US law and regulations, said Kim Donovan, a former Treasury Department official now at the Atlantic Council think tank.
“A key aspect of this compliance is managing the companies’ exposure and risk of their goods getting into the wrong hands,” Donovan said. She added that US companies need to conduct due diligence to know their customers and the departments of Commerce and Justice have been sharing detailed information to help companies understand what to be on the lookout for and to clarify what they’re required to do by law.
Western chipmakers have come under criticism because their products keep showing up in Russia weapons. TI’s chips, for example, have been found in the country’s air-launched Kinzhal missiles and attack drones called the Lancet-3. The company accounts for about 14% of the components retrieved by Ukrainian authorities after strikes in their country.
“Both the governments and the companies have done a lot, but not enough,” said Vladyslav Vlasiuk, Ukraine’s commissioner for sanctions policy. “We would love to see our partners be more decisive.”
TI says that it stopped selling products directly to Russia even before it was required to under Western sanctions and in a statement to Bloomberg said it prohibits customers and distributors from reselling its chips into Russia. The company acknowledged that some TI technology has been used in weaponry, but adds it continually upgrades screening to minimize the risks of its products falling into Russian hands.
While all four of the chipmakers drew scrutiny during the US Senate investigation this year, TI was called out because it hadn’t taken two of the steps that most other technology companies make part of their sanctions reviews. First, while companies like Intel and Analog Devices use risk management databases early in the sales process to block potentially illicit buyers, TI deploys such procedures “significantly later in the customer screening process, and sometimes not at all,” according to a report from the Permanent Subcommittee on Investigations, chaired by Blumenthal. In addition, TI appears to allow companies to buy chips from its website without disclosing the end user for those products — in contrast with most other chipmakers that require such end user detail to avoid selling to suppliers who pass goods on to places like Russia, Iran or North Korea.
TI disputes that it has systematic flaws in its distribution procedures. The company said in its statement that its global trade compliance program was robust and developed in accordance with guidance from the Department of Commerce, and incorporates commercially available third-party risk management databases as part a multi-layered screening process to monitor the sale and shipment of its chips. The company added that if it finds evidence indicating product diversion, it investigates and takes action.
The US and EU have published additional guidance on enforcing the Russian sanctions, pushing companies and banks to enhance their due diligence on supply chains and financial transactions. The guidance sets out a series of recommendations that companies and their partners should adopt to mitigate risks, including red flags for possible violations. These include a sudden spike in orders from a particular customer, the use of shell companies, suspicious customer addresses and concealing information about end users.
Several of these flags appear to be present in the supply route. The order logs reviewed by Bloomberg show clear surges in purchasing for delivery to Russia. Three of the companies at the heart of the chips route are registered at addresses in Hong Kong commonly used as fronts when the actual operations are elsewhere. Bloomberg could not assess whether the companies involved used additional intermediaries or took steps to mask their identity or location, which could hide potential red flags from companies.
The sales volume through this supply channel is a small part of the restricted technologies that Russia is able to source from abroad. The country imported more than $1 billion in US and European chips last year from the likes of Intel, Advanced Micro Devices Inc. and Infineon Technologies AG, Bloomberg previously reported.
Intel, AMD, Infineon and Analog Devices have said they fully comply with sanctions requirements, ceased business in Russia when the war broke out and put in place policies to monitor compliance. They also work to counter the illicit diversion of goods. Still, European government officials worry there are additional channels involving similar distributors and companies.
“Western manufacturers can definitely do better due diligence to prevent battlefield items from ending up in Ukraine,” said Maria Shagina, a senior research fellow for economic sanctions, standards and strategy at the International Institute for Strategic Studies. “That requires adopting a holistic approach in risk management: moving away from a box-ticking, pro forma compliance to a comprehensive and investigative one.”
Ukrainian investigators have recovered and cataloged more than 4,000 Western components used in Russian weapons since the invasion began, with Texas Instruments one of the top sources of the parts retrieved. Some of the largest Russian strikes against Ukraine’s infrastructure and other targets have taken place this year.
Invoices and other documents seen by Bloomberg make clear that TI products are important to the war effort. Although Moscow has been able to produce some parts it sourced from the West before sanctions were imposed or to substitute them for alternatives made in countries like China, it still depends on many foreign-made technologies.
In one case reviewed by Bloomberg, a Russian military enterprise submitted a detailed explanation to the Ministry of Defense for its purchase request. Among the many dozens of items it sought from various manufacturers was a single-supply voltage translator produced by TI. The product, which costs about 10 cents, is used in battery-powered devices so components with different voltages can communicate with each other.
The would-be buyer wrote in the three-page submission that the item is essential for the production of radio modems and there are no locally produced alternatives in Russia. TI’s product is the best choice that guarantees that modems will work at “a specified level of durability and reliability,” the document says.
Data from the ERP system of the Russian distributor reveals that among the most sought-after TI products are flip-flop chips, used to protect devices from electric power flowing in the wrong direction when they go into sleep state, and step-down power modules, typically used in communications gear.
Once the Russian government approves such purchases, the TI gear is ordered via at least one middleman and shipped to at least one intermediate country. Among the intermediaries involved are Sure Technology, Chipower Electronics and Horsway Tech in Hong Kong, according to documents reviewed by Bloomberg.
Data compiled by the trade-tracking services ImportGenius and NBD shows that the three companies acted as consignors shipping electrical components, including some TI products, to Russian buyers. The company names appeared on thousands of trade documents from Russian customs. The trading activities continued at least until April, when data was last available. TI said it had already blocked the three Hong Kong companies from ordering any parts months before Bloomberg contacted TI for this story.
A Bloomberg reporter visited the registered addresses for all three Hong Kong companies in Kowloon and found the premises hidden in old office buildings occupied by company formation agents — third-party operatives who help corporations establish an address in the city without any personnel on site. LED displays or sheets of A4 paper hung on the walls beside the entrances, showing long lists of companies using the offices as official addresses in Hong Kong.
Publicly available company registry and recruitment data show that the firms are subsidiaries of Shenzhen-based trading companies in China and that at least one of them has been looking to hire Russian speakers. On Liepin, one of the most popular job websites in China, ads attributed to Sure Technology say the company is looking for people with experience in electronic component exports and fluent in Russian.
The parent companies in Shenzhen didn’t respond to emails seeking comment or their email addresses didn’t work. Staff who answered phone calls said the people in charge were not available for comment.
Bloomberg provided TI with a list of about half a dozen popular products that have been shipped to Russia from Hong Kong this year, according to the Russian distributor’s ERP system. TI said it did not ship any of those goods to any of the three Hong Kong companies in 2024, a further suggestion there are likely intermediate steps before the products reach Hong Kong or some goods may have been purchased in previous years.
According to the data, the goods are shipped from Hong Kong to Russia mostly through a freight company called Sea Global SCM Ltd. and the Russian airline Aeroflot. Sea Global didn’t reply to requests for comment, and Bloomberg was unable to get through to the firm over the phone. Aeroflot didn’t reply to requests for comment.
At the end of the supply chain is a group of distributors including Arvis Group, Alternativa and Getchip. The companies are all registered at addresses on Khokhryakova street in the city of Yekaterinburg, according to the Russian registry of companies. Business appears to be strong: Getchip’s revenue increased by 65.5% last year compared with 2022, reaching 6.7 trillion rubles ($68.2 million), information in the registry shows. The three firms didn’t reply to requests for comment.
It is from this group of companies that the TI goods are ultimately delivered to the final clients, including entities in Russia’s military-industrial complex. Several names that appear in the Russian distributor’s ERP system as customers are supplying critical components for weapons and military systems or involved in their production, according to the European government officials. They include Elara, NPP Mera, PCB technologies, FGUP PO Oktyabr, NPF Micran, Angstrem EKB, MKB Fakel, SKB MO RF and AO NIIEP. Several of the entities have been sanctioned by the US and some of its allies. None of the companies replied to requests for comment.
Not all the customers are military firms. Another name in the ERP system is NAMI, the company that makes Aurus, Vladimir Putin’s favored luxury limousines. Both NAMI and Aurus are sanctioned by the US. The two firms didn’t reply to requests for comment.
“As long as Western technology is available to terrorist regimes, they will continue to turn components into weapons,” said Vlasiuk, the Ukrainian commissioner. “I think we can all do more. More thorough export control. Stricter compliance procedures on the side of manufacturers. More commitment from third countries.”