Highlights

This case study is an assessment of roughly one month of trade data scrutinizing Chinese exports to Russia of Tier 1 goods valued at roughly $40 millions of dollars.  Tier 1 goods are the most important items Russia needs to manufacture and build the precision-guided weapon systems critical to waging war in Ukraine.  They are further characterized by the lack of Russia’s domestic production of them and limited global manufacturers, requiring Russia to import them.  This case study adds to the growing body of work that China not only has emerged as a critical source of Tier 1 items, cementing its role as a key backer of Russia’s military industrial complex, but it does not take any meaningful steps to block these transfers.

The study identified hundreds of Russian companies importing Tier 1 items, which are not made in Russia, from Chinese companies containing a mix of illegal Western products and Chinese-manufactured products.  However, only 33 of those Russian companies importing Tier 1 goods have been sanctioned by the United States.  Of the 187 Chinese manufacturers identified as supplying Tier 1 goods, only 13 have been sanctioned for their activities, highlighting a clear lack of sanctions on Chinese companies.  

The trade data in this case study supports that Chinese companies are providing their own domestically produced Tier 1 goods to Russia, giving Russia a substitute for Western goods.  This is consistent with other studies, such as the War and Sanctions web portal^[1] that lists many Chinese-made goods found in downed drones or missiles in Ukraine.   

This case study highlights 15 Chinese manufacturers producing and supplying Tier 1 goods to Russian companies, some of which are connected to the Russian military industrial complex (see Table H1).  Six of those companies have been sanctioned by the United States, but the remainder are non-sanctioned entities, despite their supply potential and the Tier 1 items that were shipped to Russia, according to the trade data.   

Russia aims to supplant its need for Western Tier 1 items as well as other key goods with Chinese goods. This case study identifies several of these Chinese manufacturers and helps to reveal and highlight the role of China in providing direct material support to Russia’s war in Ukraine. While this study is not comprehensive and is limited to a short period of time, it nonetheless shows a number of Chinese companies providing Tier 1 goods to Russia in violation of sanctions. The list is likely far larger today. These distributors and manufacturers deserve sanctions.  With regards to the manufacturers, these sanctions may have a broader impact because these companies may be doing business in Europe, Japan, or the United States. 

 

Gowin Semiconductor Corporation	Not Sanctioned
Zhuhai Orbita Aerospace	Yes Sanctioned
Hubei Synraid Technology Co., Ltd.	Not Sanctioned
Loongson Zhongke Technology Co., Ltd.	Yes Sanctioned
Ningbo KLS Electronic Co., Ltd.	Not Sanctioned
Allwinner Technology	Not Sanctioned
XMTI	Yes Sanctioned
Beijing Microelectronics Technology Institute (BMTI)	Yes Sanctioned
Chengdu HiWafer Semiconductor Company	Yes Sanctioned
GigaDevice	Not Sanctioned
Hisiwell Technology	Not Sanctioned
Shanghai Anlogic Infotech	Not Sanctioned
Shenzhen Pango Microsystems Co.	Not Sanctioned
AGM Micro	Not Sanctioned
Mornsun	Yes Sanctioned

Table H1.  The 15 Chinese manufacturers discovered in this Institute case study where their Tier 1 goods were shipped to Russia, based on commercial trade data from early 2024.

 

Introduction

As part of the Institute’s on-going examination of Russia’s importation of sensitive goods for its military programs, the Institute extended an earlier evaluation of sanctioned “Tier 1” imports by Russia in the eighteen months prior to December 31, 2023. This study focuses on a one-month period of January 2024 and seeks to identify Chinese manufacturers supplying Russia with sanctioned goods, namely those classified as Tier 1 goods during this period, with an underlying purpose to find examples of Chinese manufacturers displacing Western suppliers of these goods. 

According to the Bureau of Industry and Security (BIS) Common High Priority List (CHPL), Tier 1 items are defined as Items of the highest concern due to their critical role in the production of advanced Russian precision-guided weapons systems, Russia’s lack of domestic production, and limited global manufacturers.  The items in Tier 1 are identified by their Harmonized System Codes (HS Codes) from the BIS CHPL.^[2]  The BIS CHPL, which is also applied by the European Union^[3] and other Western states^[4], applies trade restrictions to Russia on the most sensitive, sought-after Western electronics, and other commodities that Russia requires to build its war machine.  Without these critical commodities, Russia would be severely constrained in its ability to produce the advanced missiles, drones, and other combat systems it needs to wage its war of aggression in Ukraine. 

Chinese companies play a major role in sourcing, manufacturing, and supplying Tier 1 items to Russia. Highlighting China’s supply role is critical to holding it responsible and accountable for its continued material and economic support to Russia and its war in Ukraine.  The trade data shows that Chinese companies are not only sourcing and supplying restricted Western Tier 1 items, acting as trading companies, distributors, and brokers, but Chinese manufacturers are also engaged in providing Russia with domestically produced goods.  This is an important process enabling Russia to continue to obtain the critical items it needs to produce weapons without facing current Western sanctions restrictions.  It is also a Russian policy to seek and source critical goods in China and Iran, and China appears to be cooperating in implementing this policy.

This report examined 5243 trade records, almost all during January 2024, accounting for nearly $40 million worth of Tier 1 items being exported by Chinese companies to Russia.  As in earlier studies, many were produced by the usually seen Western companies allowing their goods to go to China, indicating a severe violation of U.S. and EU sanctions.  However, some of the exported Tier 1 items were produced by Chinese or non-Western companies and likely included goods for Russia’s military industrial complex.  See Figure 1 for a full distribution of the total cargo value by Western and non-Western manufacturers.  As can be seen, during this one-month snapshot, Western manufacturers still accounted for the majority of Tier 1 items reaching Russia, but non-Western (principally Chinese) manufacturers accounted for 36 percent of the goods. This report seeks to answer where are these Tier 1 items going and who are the Chinese manufacturers?

 

Figure 1.  A distribution of cargo values by Western and non-Western manufacturers. 

 

This report is a follow-on to a previous study published in September 2024 by the Institute on the import and export of Tier 1 items by Russia and China.[5]  The previous study conducted in September 2024 identified $1.5 billion worth of Tier 1 items flowing from China to Russia.  For several months, the amounts of Tier 1 goods flowing to Russia were well below $50 million dollars but spiked in December 2024 at $125 million.

This case study evaluates Tier 1 goods shipped in January 2024.  Efforts are on-going to acquire later data. 

 

Russian Imports of Tier 1 Goods in January 2024

Russia's receipt of about $40 million total of Tier 1 goods is significantly lower than the December 2024 value, found in an earlier Institute study, but consistent with other months in the previous study.  The $40 million value represents only those goods with a country of origin listed as China, which are overall roughly half of the total Tier 1 cargo value sent to Russia from all countries of origin.  For example, roughly an additional $52 million worth of Tier 1 items had an undeclared country of origin.  It is difficult to determine the true origin of those goods.  The reason for such a large amount of undeclared country of origin goods is unclear. 

During this period, Russia received shipments containing over $24.2 million worth of illegal Tier 1 items produced by 121 Western manufacturers and shipped to Russia by Chinese companies (see Figure 2 and Table 1).  Over $1.2 million worth of Tier 1 items had an undeclared manufacturer. The rest of the shipments were manufactured by non-Western companies, the majority of which are based in China. Western manufacturers whose Tier 1 goods were sent to Russia identified in the trade data included, unfortunately, the usual major companies like Analog Devices, XLINIX, ST Microelectronics, and Texas Instruments, among others.  The Tier 1 goods produced by these companies have played a critical role in Russia’s ability to produce advanced weaponry, including Shahed 136 drones that have pummeled Ukraine and murdered its people. 

Although not pursued here, it is likely that the actual flow of Tier 1 commodities between China and Russia has not dropped as evidenced by Russia’s increasingly large and sophisticated use of drones and ballistic missiles.  These weapons require large amounts of Tier 1 items, the vast majority of which Russia cannot produce domestically and must import.  The near daily attacks show that Russia continues to acquire Tier 1 goods in large quantities.  China has been a key supplier of those goods and is one of the few non-western countries capable of manufacturing and supplying such large quantities.  Based on this case study focused on one month, including a comparison to earlier results, Chinese manufacturers are likely supplying a growing fraction of Tier 1 goods to Russia.

 

Figure 2.  The top 20 Western brands identified in the Tier 1 exports from China to Russia.

 

Top 20 Shippers of Tier 1 Items to Russia	Total Cargo Value
CORP-LINK INTERNATIONAL FORWARDING Ltd.	$2,892,418.30
FEITIAN TECHNOLOGIES Co., Ltd.	$2,243,409.04
QUANTUMFLOW LIMITED.	$1,788,480.00
HK PARK ON ELECTRONICS TECHNOLOGY Co., Ltd.	$1,617,711.35
HONGKONG YAYANG TRADING Ltd.	$1,547,853.39
WUHAN TIANYU INFORMATION INDUSTRY Co., Ltd.	$1,358,358.47
XIEFENG-HK-INT'L ELECTRONICS LIMITED.	$1,280,672.82
ONLITEX ELECTRONIC HOLDING Ltd.	$1,207,899.11
NORD LOGISTICS LLC.	$1,141,043.64
HONGKONG CHIP LINE INTERNATIONAL Co., Ltd.	$882,163.81
IMAXCHIP TECHNOLOGY Co., Ltd.	$880,727.59
KCONE INTERNATIONAL TRADE LIMITED.	$756,776.14
OMICRON (BEIJING) TECHNOLOGY Co., Ltd.	$731,035.05
SHENZHEN YILIAN TECHNOLOGY DEVELOPMENT Co., Ltd.	$700,110.37
LETT TRONIC GROUP LIMITED.	$645,849.35
GUANGZHOU FEIREN LOGISTICS Co., Ltd.	$632,934.67
MAINZ MACHINE Co., Ltd.	$630,040.33
HYTERA COMMUNICATIONS LIMITED	$618,887.52
YUSHA GROUP Co., Ltd.	$606,826.19
CLOUDBERRY FZCO.	$600,591.95

Table 1.  The top 20 shippers identified in the trade data sending Tier 1 goods to Russia. 

 

Tier 1 Items

The Tier 1 goods imported can be broken down by their HS Codes, allowing some insight into the nature of the goods being exported by Chinese companies to Russian importers.  Tier 1 constitutes four HS Code chapter 85 codes (8542.31, 8542.32, 8542.33, and 8542.39) detailing the most important electronics which Russia needs to build drones, missiles, and other weapon systems. Russia depends on illicit import practices and networks to acquire these goods from overseas, mainly Western goods via China. 

The four HS codes in Tier 1 follow:

• HS Code 8542.31, electronic integrated circuits: Processors and controllers, whether or not combined with memories, converters, logic circuits, amplifiers, clock and timing circuits, or other circuits.
• HS Code 8542.32, electronic integrated circuits: memories.
• HS Code 8542.33, electronic integrated circuits: amplifiers.
• HS Code 8542.39, electronic integrated circuits, not otherwise specified (This code usually includes Field Programmable Gate Arrays (FPGA), a critical item in anti-jamming units of drones and missiles.)

 

Figure 3 shows the frequency of each HS Code category as found in this study’s trade data.  The majority of the shipments have been labeled with the broadest HS Code category (8542.39).  This would suggest that Russia is importing many FPGAs. 

For example, the trade data revealed at least 29 shipments, valued at over $1.2 million, that explicitly included FPGAs and were being shipped to Russian importers.  Nearly all of the identified FPGAs were manufactured by prominent Western brands including Texas Instruments, XILINX, Altera Corporation, and Intel.  However, one shipment contained FPGAs produced by a Chinese manufacturer (see below under Gowin Semiconductor Corporation).  There were apparently many more shipments of FPGAs made by Western and Chinese manufacturers where the product description was obfuscated to prevent an identification of the actual goods being sent to Russia. 

 

Figure 3. The frequency of each HS Code as found in the trade data between January and July 2024.

Obscuring the product descriptions is a common phenomenon, complicating the picture of what is being sold by Chinese companies to Russia.  Many companies obscure the product descriptions of the shipments with generic language, making it difficult to identify exactly the type of microelectronic products being sent to Russia.  For example, in January 2024, XH SMART TECH (CHINA) Co., Ltd., a Chinese technology company, manufactured and shipped hundreds of thousands of dollars’ worth of vaguely labeled “INTEGRATED MONOLITHIC CIRCUIT CIRCUITS” to the sanctioned Russian importer, OOO INTEKHKARD (TIN: 7701314914).^[6]  XH SMART TECH (CHINA) Co., Ltd. was sanctioned by the United States on October 30, 2024, for its material support for Russia’s military industrial complex.^[7]  The large amount of Chinese alternative goods in the trade data, although vaguely characterized, is a significant finding given that Russia is working to substitute the illegal Western commodities it uses to build weapons with more readily available Chinese ones.  Obscuring the product descriptions in shipments makes it more difficult to identify the product and speculate, for example, on its potential use in a weapon system.

China’s Supply of Tier 1 Goods

Russia received from China over $14.4 million worth of Tier 1 items produced by non-Western manufacturers. Many of those Tier 1 goods were produced by Chinese companies.  Table 2 below contains a list of the top 20 non-Western manufacturers. 

Looking at what Tier 1 HS Code’s Chinese companies traded in can also offer some insight into the type of trade being conducted.  While Chinese suppliers traded in all goods classified under Tier 1 HS Code’s, the HS Code 8542.39 saw the most trade activity by Chinese manufacturers (see Table 3).  This HS Code is typically used as a catch-all, an “other” category that can encompass many types of microelectronics, however, it is significant because it has been typically used to classify the sale of field programmable gate arrays (FPGA), which are a critical component used by Russia to manufacture a variety of weapon systems, including in the anti-jamming module of the Shahed 136 (Geran-2) drone.  FPGAs are a potential bottleneck and are facing greater scrutiny by Western officials and companies because of their wide application in weapons.  However, Chinese companies have potential to serve as a source of this critical component.  Table 4 contains a list of the top 20 Chinese manufacturers trading in each Tier 1 HS Code. 

While China can manufacture and supply many Tier 1 goods, those products may be of lesser quality and technical sophistication than the Western designed products.  Regardless, the data highlights Russia’s attempts to transition to Chinese products. 

 

Top 20 Non-Western Manufacturers	Total Cargo Value (Exports to Russia)
FEITIAN TECHNOLOGIES Co., Ltd.	$2,243,409.04
WUHAN TIANYU INFORMATION INDUSTRY Co., Ltd.	$1,377,330.42
ZHUHAI ORBITA AEROSPACE.	$650,303.28
VESS ELECTRONICS Co., Ltd.	$630,040.33
FDMTEK	$616,381.50
CLOUDBERRY FZCO	$600,591.95
XH SMART TECH (CHINA) Co., Ltd.	$590,442.13
VOLK SMART TECHNOLOGY LIMITED.	$518,488.09
SHANGHAI HUAHONG GRACE SEMICONDUCTOR MANUFACTURING Co., Ltd.	$464,144.19
HUBEI SYNRAID TECHNOLOGY Сo., Ltd.	$430,536.03
BEIJING MICROELECTRONICS TECHNOLOGY INSTITUTE.	$400,719.13
SHENZHEN COMNECT TECHNOLOGY Co., Ltd.	$358,783.04
GUANGZHOU AUSAY TECHNOLOGY.	$354,107.58
SHENZHEN TENDA TECHNOLOGY Co., Ltd.	$305,481.43
HARBIN FORWAY TECHNOLOGY Co., Ltd.	$222,619.12
ARTERY TECHNOLOGY Co., Ltd.	$218,678.47
BEIJING CHUANGYUAN LEKING ELECTRONIC TECHNOLOGY Co., Ltd.	$160,001.42
SUZHOU WANXINWEI ELECTRONICS TECHNOLOGY Co., Ltd.	$153,943.04
SHENZHEN SIRIUS SEMICONDUCTOR Co., Ltd.	$153,769.51
SHENZHEN OUSAI ELECTRONIC MATERIAL Co., Ltd.	$133,662.30

Table 2.  The top 20 non-Western manufacturers identified in the trade data. Many of the companies are Chinese entities. 

 

Tier 1 HS Code	Number of Chinese Manufacturers Trading Per HS Code*
8542.39	135
8542.31	59
8542.33	23
8542.32	17

Table 3. A breakdown of the Tier 1 HS Codes Chinese manufacturers traded in.  HS Code 8542.39 is traded significantly more than the others.  *Note that a Chinese company may have traded under multiple HS Codes. 

 

HS Code 8542.39	HS Code 8542.31	HS Code 8542.33	HS Code 8542.32
VESS ELECTRONICS Co., Ltd.	FEITIAN TECHNOLOGIES Co., Ltd.	YIWU ZIYI TRADING FIRM.	ZHUHAI ORBITA AEROSPACE.
FDMTEK	XH SMART TECH (CHINA) Co., Ltd.	RUNIC TECHNOLOGY Co., Ltd.	SHENZHEN TENDA TECHNOLOGY Co., Ltd.
VOLK SMART TECHNOLOGY LIMITED.	SHENZHEN TENDA TECHNOLOGY Co., Ltd.	YINGTRON MICROWAVE ELECTRONICS Co., Ltd.	SHENZHEN LONGSYS ELECTRONICS Co., Ltd.
SHANGHAI HUAHONG GRACE SEMICONDUCTOR MANUFACTURING Co., Ltd.	HUBEI SYNRAID TECHNOLOGY Co., Ltd.	MKR TECH	LONGSE TECHNOLOGY LIMITED
BEIJING MICROELECTRONICS TECHNOLOGY INSTITUTE.	ARTERY TECHNOLOGY Co., Ltd.	HISIWELL TECHNOLOGY Co., Ltd.	SHENZHEN COMNECT TECHNOLOGY Co., Ltd.
YIWU ZIYI TRADING FIRM.	SHENZHEN COMNECT TECHNOLOGY Co., Ltd.	JIANGSU RUNIC TECHNOLOGY Co., Ltd.	GOLDEN EMPIRE INTERNATIONAL (CHENGDU) LIMITED.
GUANGZHOU AUSAY TECHNOLOGY.	LOONGSON ZHONGKE TECHNOLOGY Co., Ltd.	CHENGDU HISIWELL TECHNOLOGY Co., Ltd.	SHENZHEN XIONGXIN TECHNOLOGY Co., Ltd.
HARBIN FORWAY TECHNOLOGY Co., Ltd.	ROCKCHIP	HONGKONG TALISON ELECTRONICS LIMITED.	ZBIT SEMICONDUCTOR Co., Ltd.
NINGHAI JIAOER IMPORT AND EXPORT Co., Ltd.	HANGZHOU ACOSOUND MEDICAL TECHNOLOGY Co., Ltd.	NEDI TECHNOLOGY Co., Ltd.	ADD COMPONENTS Co., Ltd.
SHENZHEN COMNECT TECHNOLOGY Co., Ltd.	SHENZHEN OUSAI ELECTRONIC MATERIAL Co., Ltd.	SHENZHEN DINSTAR Co., Ltd.	HUAWEI TECHNOLOGIES Co., Ltd.
YIWU XUNQI TRADING FIRM.	QIXUAN TECHNOLOGY LIMITED.	SMD	HUABANG INTEGRATED CIRCUIT Co., Ltd.
BEIJING CHUANGYUAN LEKING ELECTRONIC TECHNOLOGY Co., Ltd.	SHENZHEN DINSTAR CO., LTD	SHENZHEN MAIWEIXUN ELECTRONIC Co., Ltd.	WANGHONG ELECTRONICS Co., Ltd.
SUZHOU WANXINWEI ELECTRONICS TECHNOLOGY Co., Ltd.	ALLWINNER TECHNOLOGY Co., Ltd.	SHENZHEN INTEGRATION MULTIMEDIA TECHNOLOGY Co., Ltd.	SHENZHEN RUIXIN IMP EXP Co., Ltd.
SHENZHEN SIRIUS SEMICONDUCTOR Co., Ltd.	HENAN PAIQING E-COMMERCE Co., Ltd.	SG MICRO CORP	SICHUAN AEE AVIATION TECHNOLOGY Co., Ltd.
SHENZHEN KTC COMMERCIAL DISPLAY TECHNOLOGY Co., Ltd.	RICE MICROELECTRONICS INC.	CHENGDU CUIWEI ELECTRONIC Co., Ltd.	SHENZHEN PANCUN TECHNOLOGY Co., Ltd.
CLOUDMAX TECH CO LIMITED КИТАЙ	NINEROBOT HONG KONG TRADING LIMITED.	UTD SEMICONDUCTOR Co., Ltd.	3 PEAK ELECTRONICS Co., Ltd.
WUXI GDE TECHNOLOGY Co., Ltd.	SHENZHEN CICIEN PRECISION HARDWARE TECHNOLOGY Co., Ltd.	CHONGQING YONGFA INDUSTRIES LTD.	GIANTEC SEMICONDUCTOR CORPORATION.
TUNEFUL CORPORATION RF.	BEIJING WULING ELECTRONIC TECHNOLOGY Co., Ltd.	BROADCHIP TECHNOLOGY GROUP Co., Ltd.
SHANGHAI FUDAN MICROELECTRONICS GROUP Co., Ltd.	HEJI ELECTRONIC TECH (HK) LIMITED.	BENTEX LIMITED.
CHENGDU HIWAFER SEMICONDUCTOR Co., Ltd.	XIANGSHUO TECHNOLOGY Co., Ltd.	LONGSE TECHNOLOGY LIMITED

Table 4. The first 20 Chinese manufacturers from the trade data separated by the HS Code category of the items sent to Russia in order of CIF value.

 

Notable Chinese Manufacturers Identified in the Trade Data 

At least 15 Chinese manufacturing companies were identified that make Tier 1 goods and provided them to Russia. Table H1 above lists these companies and the following describes them.

Gowin Semiconductor Corporation

A shipment of Gowin Semiconductor Corporation FPGAs was sent to Russia, valued at $6,000.  Gowin is a relatively new entrant to FPGA manufacturing and is based in Guangzhou China.  The FPGAs were shipped to Russia by the US sanctioned entity AVINEX GLOBAL LIMITED, to the Russian importer, AO VOSTOK (TIN: 7802328180), which is currently sanctioned by the Ukrainian government.^[8]  Gowin Semiconductor has the potential to be a major supplier of FPGAs for Russian companies. Despite the company's cooperation with a US sanctioned entity, the company claims to abide by “export control and economic sanctions… from jurisdictions and entities such as China, the United States, the European Union, the United Nations, and other key countries and organizations.”^[9]  The company further states, “for any violations that are verified, Gowin will strictly punish those directly responsible and those with management responsibilities, and terminate the employment relationship with serious violators.” 

Zhuhai Orbita Aerospace

The trade data contained shipments of products from Zhuhai Orbita Aerospace, a manufacturer of satellite equipment used in the aerospace industry, data transmission, and a developer of AI chips used in facial recognition and video analysis.  The company is sanctioned by the United States.  Zhuhai Orbita Aerospace shipped hundreds of thousands of dollars of Tier 1 items covered by HS Code 8542.32 and vaguely labeled as “storage devices.”  They were sent to the Russian company, JSC Epsilon (TIN: 7813659804), a supplier of high-end electronic components produced by Chinese manufacturers and to “20 private enterprises manufacturing space, military and industrial-grade electronic components.”^[10]  JSC Epsilon lists Zhuhai Orbita Aerospace as one of its partners.  Epsilon also claims it can supply “functional and complete analogs of microcircuits from Western manufacturers FPGA, ADC, DAC, static and dynamic memory, microwave microcircuits, passive elements, generators, connectors.”  FPGAs are a critical component needed for drone and missile production. 

Hubei Synraid Technology Сo., Ltd.

Another Chinese manufacturer, Hubei Synraid Technology Сo., Ltd., manufactured and shipped hundreds of dollars’ worth of “monolithic integrated circuits” to the Russian company, AO Novakard (TIN: 5262045537).  The goods shipped were listed under HS Code 8542.31.  Novakard is a Russian producer of sim cards used in credit cards and other electronic plastic cards.  Synraid also claims to be able to supply many other types of electronic components, including “NVIDIA Jetson AGX Orin Series” AI modules.^[11]  While the Russian importer is not particularly noteworthy, Synraid is able to supply Russia with a wide range of dual-use electronic components that could be used in weapons manufacturing. 

Loongson Zhongke Technology Co., Ltd.

The Chinese manufacturer Loongson Zhongke Technology Co., Ltd., manufactured hundreds of thousands of dollars’ worth of “integrated monolithic circuits for telecommunication equipment” listed under HS Code 8542.31 that were shipped by another Chinese company to Russia.  In late 2022, due to national security concerns, China banned the export to Russia of Loongson’s latest CPU, or central processing unit that functions as the "brain" of a computer, executing program instructions, performing calculations, and managing data flow, suggesting a clear dual-use capability.^[12]  China lifted this export ban after the U.S. blacklisted Loongson and cut its access to the U.S. market.  Media reports suggest that Loongson’s CPUs are getting widely adopted in Russia as a viable alternative to Western counterparts.^[13]

Ningbo KLS Electronic Co., Ltd.

The Chinese company, Ningbo KLS Electronic Co., Ltd., manufactured and shipped electronic integrated microcircuits as well as processors and controllers, all Tier 1 classified goods, to the Russian importer LLC Digikom (also spelled Digicom), a U.S. sanctioned and designated Russian military end-user.  Digikom was identified as an “[entity that] performed contracts for Russian government entities, including entities in the Russian defense sector.”^[14]  KLS primarily dealt in goods classified under Tier 1 HS Codes 8542.39 and 8542.31.  KLS claims to offer R&D, manufacturing, and distribution solutions.^[15] The company offers a broad range of components, including connectors, capacitors, circuit protection, switches, sensors and enclosures, thus catering to industrial, telecom, internet of things (IoT), automotive and consumer electronics applications.  Publicly available trade data shows that entities in India, Ukraine, and Russia are its top buyers.^[16] 

Allwinner Technology

Allwinner Technology is a Chinese semiconductor manufacturer that specializes in producing system on chips (SoC) products that are usually used in consumer products such as mobile phone devices and cars as well as industrial applications.^[17]  According to the online publication Defense Express, the Allwinner H616 processor is used in a single-board computer found in Russian FPV drones.^[18]  The trade data contains two records of Allwinner manufactured products with a general product description of “integrated monolithic circuits” worth around $40,000 classified under HS Code 8542.31 being shipped to the Russian company, Educational Robotics LLC.  According to the Educational Robotics website, their goal is to cultivate interest in engineering in young children, offering a range of robotics and construction kits.^[19]  Some of the products they offer are “quadcopters and UAV designers”, “cubes and routes for UAV flights”, “equipment for training in the ‘Drone Control’ program”, and “quadcopters and UAV/UAS aircraft-type designers.”  Some of the products for drone control show advertisements containing people in military fatigues, suggesting the company’s products have a military application. 

Figure 4. Two of the images used for “multirotor UAV operator simulator pl-drone, configuration 4 – maximum” offered on the Educational Robotics LLC website supposedly for young children's educational purposes, however the advertisement shows a person in military fatigues behind the UAV simulation device.^[20]

 

XMTI

The Chinese company, XMTI, is mentioned in the trade data as the listed manufacturer of $16,912 worth of goods described as “integrated hybrid circuit (Not Electrical Scrap), not for military use.”  XMTI likely stands for Xian Institute of Microelectronics Technology, a U.S. sanctioned entity, which is noteworthy for its close association with China’s defense industry.  XMTI is one of the two entities operating under the 771 Research Institute of China Academy of Aerospace Electronics Technology, which “is responsible for detailed design and manufacturing of missile-borne computers, missile guidance sets, and associated components”^[21] and is under the umbrella of the China Aerospace Science and Technology Corporation’s (CASC) Ninth Academy.  XMTI is reportedly created from the former Chinese Academy of Sciences (CAS) 156 Engineering Office and is a manufacturer of “application specific ICs (ASICs), radiation-hardened ICs, field programmable gate arrays (FPGAs), digital signal processors (DSPs), system on chip (SoC), multi-chip modules (MCMs), system in a package (SiP), memory devices, CPUs, MEMS, radio-frequency integrated circuits (RFICs), analog to digital converters (ADC), digital to analogue converters (DAC), and printed circuit boards (PCBs).”^[22]  On the other hand, the Russian importer of this shipment is a company called InTech-Rus, described as a “supplier of highly reliable electronic components.”^[23] This company is notable for a new product advertised on their website, a transceiver with the code name of B9361RBB, “which is a complete analog of the AD9361 transceiver from Analog Devices” and “is robust against the external influences of space and is intended for use in phased-array radars, satellite communication systems, and unmanned aerial vehicles.”[24]  Notably, the manufacturer of this piece is the Beijing Microelectronic Technology Institute (BMTI) which is a U.S. sanctioned government-backed Chinese high-tech research institute and the second institute under 771 Research Institute along with XMTI.^{[25] [26]}  Despite the note regarding the non-military use in the product description of this shipment it is entirely feasible that the product may have had a military dimension.

Beijing Microelectronics Technology Institute (BMTI)

The trade data contains $400,000 worth of BMTI (Beijing Microelectronics Technology Institute) manufactured Tier 1 goods being sent to Russia in January 2024.  Based on Ukrainian sources, BMTI products have been found inside Russian weaponry.  Specifically, BMTI’s BC7K410TBG900I FPGA, which resembles the Xilinx Kintex 7 XC7K410T, was found in Geran-2 (Shahed 136) drones.^[27]  Additionally, the main chip of the controlled reception pattern antenna (CRPA) for the Geran-2 was found to be manufactured by BMTI.^[28]  Additionally, other than the previously mentioned Russian company, InTech-Rus, another aforementioned Russian company, JSC Epsilon, also stood out as an importer of BMTI parts in the trade data.  According to their website, JSC Epsilon has “long-standing partnerships with more than 15 factories of the China Aerospace Science and Technology Corporation (CASC),” which aligns with their import from BMTI.^[29]  Notably, JSC Epsilon has announced that they have tested a development board based on the JFMK50T4 FPGA from Fudan Microelectronics, another Chinese manufacturer whose product is supposed to simulate the Xilinx Artix 7 series.^[30]  Considering both BMTI’s military association and JSC Epsilon’s work on FPGAs, with the reported presence of their parts in Russian attack drones, BMTI’s supply of Tier 1 goods to JSC Epsilon may plausibly have contained dual-use electronic components intended to supplement Western-made parts.  It is worth mentioning that $76,329 worth of Tier 1 Fudan Microelectronics-made shipments were found in the database, but no military or dual-use connections were found regarding the Russian importers of those parts.

Chengdu HiWafer Semiconductor Company

Chengdu HiWafer Semiconductor Company is another Chinese manufacturer capable of supplying Russia with dual-use electronic components.  A total of $75,541 worth of its products were shipped to JSC Epsilon in January 2024.  HiWafer specifically produces the HHS1612001, which is a system-in-package (SiP) module that enables high-speed, highly reliable control of microwave components or assemblies.^[31]  This system also includes an FPGA and is usable for military radio frequency (RF) blocks as well as civilian uses.

GigaDevice

GigaDevice is a major Chinese semiconductor company producing microcontroller units (MCUs) based on Western designed ARM architecture.  Notably, GigaDevice produces the GD32 MCU series that is similar to the Western STMicroelectronics STM32 line.  Based on Ukrainian reports, GigaDevices GD32 have been replacing the Western made STM32 chips inside Russian Geran-2 drones.^[32]  Around $85,000 of GigaDevice made components were shipped to nine different Russian importers in January 2024.

Hisiwell Technology

Another Chinese manufacturer whose products have been shipped to JSC Epsilon is Hisiwell Technology, which specializes in producing millimeter-wave and microwave electronic components that are in high demand for their military applications.  These specialized cutting-edge RF chips are used in radar systems and electronic warfare jammers and can likely be used as a substitute for Western equivalents from companies like Analog Devices. Although open-source evidence has not directly linked Hisiwell made parts to Russian weaponry, the company’s claim to be able to produce high-end RF blocks and the shipment of their products to JSC Epsilon prompts elevated suspicion.

Shanghai Anlogic Infotech

Shanghai Anlogic Infotech Co., Ltd., is a leading Chinese chip design company with a specialty in producing a wide range of FPGAs.  Anlogic currently offers four series of FPGAs targeted towards commercial use, but also potential military applications if modifications are applied, such as additional shielding.  According to the trade data, a small shipment of Anlogic chips worth $84 was shipped to the Russian electronic component’s distributor Aurum LLC.  Notably, the Russian government is listed as a client of Aurum LLC on their website, raising a potential diversion concern.^[33]

Shenzhen Pango Microsystems Co.

Pango Micro is a Chinese producer of high-end FPGAs.  The trade data shows that $2,553 worth of their products was sent to LLC ATOMA. Nearly all Pango Micro’s products are FPGAs, with a small minority being complex programmable logic devices (CPLDs), it is possible that the shipment to the Russian distributor LLC Atoma may have contained FPGAs, although more information is needed to confirm this.^[34]

AGM Micro

AGM Micro is a Chinese semiconductor design company specializing in programmable system-on-chips (SoC), FPGAs, and 32-bit microcontrollers (MCUs).  Similar to the aforementioned Anlogic, AGM Micro is another Chinese producer of potential dual-use FPGAs whose products have been shipped to Russia. For instance, AGMs FPGA/CPLD chips, such as the AG256SL100 are similar to Xilinx, Intel, and Altera programmable logic devices (for example, the Xilinx Spartan XC2S200) that have been found in Russian weaponry used in the war with Ukraine.^[35]  No record of AGM Micro parts have been found in Russian weaponry and there is no evidence linking the importer to the Russian military.  However, AGM Micro stands out as a possible supplier considering its expertise in producing FPGAs and MCUs. 

Mornsun

Mornsun Guangzhou Science and Technology is a Chinese manufacturer of power supplies that was sanctioned by the U.S. in May 2024 for supplying goods to a Russian company that was “identified as a supplier to [another] Russia-based entity [specializing] in the production and marketing of airborne equipment for military aircraft, such as airborne weapons control radars for Russian fighter aircraft.”^[36]  In January 2024, Mornsun recorded 16 shipments to seven Russian entities cumulatively worth around $8,000.  Notably a Mornsun made DC-DC converter was reportedly recovered from a Shahed-136 drone used by Russia.^[37]

 

Analysis of Sanctioned Russian Importers

An analysis of the trade data shows that 33 of the Russian importers had been sanctioned by the United States as of the writing of this report, representing a total cargo value shipped from China of $12.6 million worth of Tier 1 items produced by both Western and non-Western manufacturers.  Of those sanctioned Russian importers, thirteen were sanctioned before the period of the trade data; 12 were sanctioned during the period of the trade data; and eight were sanctioned after the period of the trade data. 

It is important to look at the total value of the goods received by sanctioned companies that were produced by only Western manufacturers to properly judge what portion of trade constituted illegal sanctions shipments and what constituted possible Chinese direct assistance to the Russian military industrial complex. 

A total of 187 Russian importers received illegal Western Tier 1 items, however, only 25 of those companies have been sanctioned by the United States as of the writing of this report. These non-sanctioned importers received roughly $15.5 million worth of illegal Tier 1 goods during the period of the trade data, while the 25 sanctioned companies received at least $8.9 million worth of illegal Western Tier 1 goods, for a grand total of $24.4 million worth of illegal Tier 1 goods.  This means that the remaining eight sanctioned Russian importers received roughly $3.7 million worth of goods manufactured by non-Western companies from Chinese suppliers.  This is a crucial point, as it shows that these companies are receiving an alternate source of critical dual-use commodities needed by Russia to build weapons. 

What further complicates the picture is just six of the 25 Russian importers that received Western Tier 1 items had already been sanctioned by the United States before the period of the trade data and continued to receive over $2 million worth of illegal Tier 1 items from Chinese suppliers.  For example, the Russian importer, JSC VNIIR-PROGRESS (TIN: 2130094170), was sanctioned in early November 2023 but continued to import over $1.7 million worth of Tier 1 microelectronics produced by ALTERA INC in January 2024, which is a well-known supplier of FPGAs, which are a crucial part in anti-jamming modules used in drones.  JSC VNIIR-PROGRESS is notable for being the producer of KOMETA, an anti-jamming system used in the Russian Shahed 136.  Another company, LLC TRION (TIN: 7716969960) was also sanctioned in early November 2023 and received over $170,000 worth of Tier 1 items produced by Western companies like Texas Instruments, Analog Devices, Quorvo, XLINX, Maxim Integrated Devices, and others.  The bottom line is that Chinese suppliers were actively selling illegal Western manufactured Tier 1 items to sanctioned Russian importers and ignoring or turning a blind eye to U.S. regulations despite a blanket ban on their export to Russia. 

Some of the non-sanctioned Russian importers were determined to procure for organizations associated with the Russian government and the Russian armed forces.  Using publicly available procurement data, at least four non-sanctioned Russian importers procured for Russian state or military entities, such as Russia's Special Communications Service, a cryptologic intelligence agency of the Federal Protective Service of Russia responsible for the collection and analysis of foreign communications and foreign signals intelligence, and Budker Institute of Nuclear Physics of the Siberian Branch of the Russian Academy of Sciences, US sanctioned.

 

Final Word and Recommendations

This case study, despite covering a period nearly two years ago, reinforces why the United States and its allies and partners should continue to issue sanctions packages and target companies involved in the supply chain of Tier 1 commodities.  Sanctions remain a valuable tool that states can use to restrict the flow of commodities to certain individuals and companies and apply pressure on Russia’s war economy and the countries supporting it.  But this case study reinforces the calls for a greater emphasis to be applied to China’s supply role.  China’s persistent and increasing role in sourcing and supplying critical Tier 1 commodities is evident in this case study.  China has become the lifeblood of Russia’s military industrial complex and a major reason why it is able to procure such massive quantities of Tier 1 and other key commodities.  At a minimum, the more than 162 Russian importers and their suppliers identified in this case study that received restricted Tier 1 western origin items should be targeted with sanctions.  Similarly, the nine non-sanctioned Chinese distributors and manufacturers shipping goods need to be considered and targeted with secondary sanctions.   

It is important to reiterate that corporations can also play a significant role in ensuring that no Western Tier 1 and dual-use items flow to Russia, especially from China.  When it comes to sophisticated items like semiconductors and microelectronics, Western producers should take major actions to limit malign foreign actors' access to their products.  This is especially needed since Chinese distributors have proven time and again that they will not stop selling sanctioned goods to Russia. As a result, Western companies should stop selling their Tier 1 goods to China or to distributors which sell in China. 

Thus, the growing export of sanctioned Chinese manufactured goods to Russia requires a more targeted response. Chinese manufacturers have emerged as suppliers of Tier 1 goods to Russia’s military industrial complex. This case study showed that some of those goods went to sanctioned Russian entities connected to the war in Ukraine.  It is expected that Russia will seek out more substitutes in China for Western products. That is why the current sanctions regime implemented by the United States and its allies and partners needs to be expanded to more aggressively target Chinese entities that manufacture and sell Tier 1 goods to Russia.  Russia’s military industrial complex should not be allowed to benefit from the procurement of Chinese substitutes for Western products.

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Sources

1. https://war-sanctions.gur.gov.ua/components