Intel suspends operations in Russia

Intel is officially suspending all business operations on the Russian market after almost three decades in the country.

The decision is “effective immediately”, the company announced on Wednesday.

In a statement on its website, Intel condemned the Russian invasion of Ukraine and called for “a swift return to peace”.

“Our thoughts are with everyone who has been impacted by this war, particularly the people of Ukraine and the surrounding countries and all those around the world with family, friends and loved ones in the region.”

The company is “working to support all of our employees through this difficult situation”.

This includes Intel’s 1,200 employees that are based in Russia, with the majority stationed at its offices in Moscow and Nizhny Novgorod.

Business continuity measures are being implemented to “minimise disruption to [Intel’s] global operations”.

According to Gartner VP analyst Gaurav Gupta, the Russian invasion can significantly impact the semiconductor industry due to the shortage of various raw materials sourced from Ukraine:

“As one example, Ukraine is a major source of inert gases, such as neon required for the semiconductor lithography process, and any disruption in the supply of neon and other noble gases from the country could trigger shortages and associated cost inflation,” Gupta said last month.

The move comes 34 days after Intel joined AMD in halting chip sales to Russia. Despite being an important producer of aluminium, a metal commonly used in all types of electronic equipment, Russia lacks a strong semiconductor industry and is known to heavily rely on imports from the US and Taiwan.

Russia is also heavily dependent on Western software for its business operations, and the country might find it challenging to meet its 2025 target of achieving “technological independence and security of the critical information infrastructure”, as ordered by President Vladimir Putin on 31 March.

Questions remain as to whether Intel, as well as other foreign corporations such as Deloitte, PwC, and KPMG, will be able to debrand its remaining operations into local partners in the Russian market, ahead of a fresh round of intensified sanctions expected later today.

Russia is also facing a mass exodus of IT professionals, with as many as 170,000 Russian tech specialists estimated to have left the country since late February, according to the Russian Association for Electronic Communications (RAEC).