Russia buys 70% of its chips from China, but the U.S.’s blockade of American semiconductors will still hit Putin hard

Late on Thursday, in response to Russian President Vladimir Putin’s invasion of Ukraine, U.S. President Joe Biden unveiled a second tranche of sanctions against Russia’s business interests that contained a dramatic broadside: a complete embargo on selling semiconductors to Russia.

“We’re going to impair their ability to compete in the 21st century economy,” Biden said on Thursday, announcing sanctions that will cut Russia off from the computer chips that power cars, smart phones, and even missiles.

Under Biden’s new embargo, any chip developed with any American technology is prohibited from sale to Russia. According to U.S. Assistant Secretary of Commerce for Industry and Security Thea Rozman Kendler, “even most products made overseas using sensitive U.S. technology will be restricted for export to Russia.”

“Russia’s access to cutting-edge U.S. and partner country technology will halt. Its defense industrial base and military and intelligence services will not be able to acquire most Western-made products,” Kendler said.

Although the U.S. only has a relatively small base of semiconductor manufacturing, U.S. companies are leaders in the field of semiconductor design and chip patents. Many foreign manufacturers rely on U.S. intellectual property to design their own chips.