In early June, a group of executives from semiconductor equipment and materials suppliers will return to Russia on an industry mission to explore emerging new business opportunities in the former Soviet bloc.
While chip manufacturing in Russia continues to face hurdles, Semiconductor Equipment and Materials International (SEMI) said it believes it's time to revisit the Commonwealth of Independent States (CIS) because several key initiatives have developed since the trade group's last executive mission to the region in 1996.
Moreover, demand for electronics systems -- which consume semiconductors -- continues to show strong growth in Russia, said SEMI, which plans to host its three-day CIS Executive Mission and Exhibit June 1 to 4.
"The development of telecommunications, PC, and television industries within Russia have created a fast-growing market for electronic components," said Alla Famitskaya, SEMI regional director for the CIS. "In 1997, the consumption of electronic devices reached $20 billion, and the local market for semiconductor components was about $600 million. Annual growth has been about 35 percent and rising."
Last August, the mayor of Moscow signed legislation creating a "special industrial zone" in nearby Zelenograd, which is now the center of Russia's electronics industry -- dubbed by many "Russian Silicon Valley." SEMI said this zone has created more favorable conditions for local and foreign companies to develop business in Zelenograd, including tax exemptions, energy payment preferences, and government-backed credit guarantees.
According to the trade group, several foreign companies have already entered into joint ventures with Russian companies, including: Hua Ko Electronics of Hong Kong with Zelenograd-based Mikron; United States-based International Rectifier with Electronica of Voronezh, Russia; Sweden's Ericsson with Kvant of Zelenograd; and Japan's Hitachi with Svetlana of St. Petersburg.
About a half dozen SEMI members now have a presence in Russia and the CIS, according to the U.S.-based trade group.
While Russian chip makers have found it difficult to compete with foreign chip technology in the home market -- because of the lack of new technologies -- they have found some success in serving Southeast Asian markets, SEMI said. Angstrem, a large Russian device maker, now exports $3.5 million semiconductors per month to consumer electronics manufacturers in the region. Angstem now uses a 6-inch wafer fab to produce products and plans the start up of 8-inch processing, according to SEMI.
Another supplier, Korona Semiconductor, has started production of ICs using 0.8-micron technology, and it has capacity to manufacture more than 10,000 6-inch wafers per month, SEMI said.