Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

US Senator urges chipmakers to help keep their chips out of Russian weapons

Published 02/27/2024, 03:19 PM
Updated 02/27/2024, 05:46 PM
© Reuters. Chairman Sen. Richard Blumenthal (D-CT) holds a file he said was given to him by Ukrainian President Volodymyr Zelenskiy during a Homeland Security and Governmental Affairs Subcommittee on Investigations hearing on the use of U.S. microchips in Russian we

By Karen Freifeld

(Reuters) -U.S. semiconductor manufacturers should do more to keep their chips from illegally making their way into equipment used by the Russian military, U.S. Senator Richard Blumenthal said at a hearing on Tuesday.

Blumenthal's comments came as reports showed U.S.-origin chips and other technology continue to be found in a wide range of Russian equipment on the battlefield in Ukraine, from drones and radios to missiles and armored vehicles.

His remarks were aimed at U.S. chipmakers like Advanced Micro Devices (NASDAQ:AMD), Intel Corp (NASDAQ:INTC), Texas Instruments (NASDAQ:TXN) and Analog Devices (NASDAQ:ADI), after reports of their products in Russian equipment or flowing to Russia, despite U.S. export controls.

The companies "have the capacity to trace and track those components well enough to do something more," Blumenthal, chair of the Senate's Permanent Subcommittee on Investigations, said at the hearing looking into how U.S. chipmakers are complying with export restrictions imposed after Russia's invasion in February 2022.

The subcommittee has sought documents and information from the four chipmakers. Preliminary data shows significant increases since 2021 in exports to countries that Russia may be using to evade controls, according to a memo by the committee majority staff.

Three witnesses who testified at the hearing described how their organizations have tracked the use of U.S. chips and components in Russian weaponry.

"Russia acquires chips using third-country distributors which can be identified," said Damien Spleeters of Conflict Armament Research, a UK-based organization which found U.S.-origin parts in Russian weapons.

Elina Ribakova of the Kyiv School of Economics said the components tend to be produced in places like China, Malaysia and the Philippines, and reach Russia through Turkey, the UAE and countries bordering Russia.

Senator Ron Johnson, the ranking member of the subcommittee, took the view that sanctions would always be evaded. "You plug one hole, another hole is going to be opening up," he said.

Intel said its contracts require customers and distributors to comply with regulations, and that it works to track and mitigate potential distributor issues.

AMD said it "welcomes strengthening public/private partnerships to combat illicit product diversion." It said it takes action when AMD products are being diverted, and works with global customs and others to stop illegitimate shipments.

© Reuters. Chairman Sen. Richard Blumenthal (D-CT) holds a file he said was given to him by Ukrainian President Volodymyr Zelenskiy during a Homeland Security and Governmental Affairs Subcommittee on Investigations hearing on the use of U.S. microchips in Russian weapons systems in the Dirksen Senate Office Building in Washington, U.S., February 27, 2024. REUTERS/Nathan Howard

Texas Instruments said it invests "significant time and resources" to keep its chips "out of the hands of bad actors."

Analog Devices said it has taken "significant and proactive measures to mitigate gray market risks." It said it takes combating unauthorized diversion seriously and works with law enforcement, government agencies and others to take appropriate action.

Latest comments

economic analysis please. really don't care for partisan back and forth
My, my, theMIC finally found someone they dont want to sell weapons too. Haha
ron johnson (r) is clearly still on putins payroll.. he finds it particularly easy to tow the maga-republican party line, which is to aid russia and our other totalitarian dictatorship enemies, and eventually become one of them...
isn't that Ron Johnson went to Russia during the 4th of July weekend several years ago.
no, that's blumenthal in the picture, a democrat. ron johnson is a republican and their agenda now, is to help our enemies, and in particular russia, their biggest sponsor..
yes the traitor did in 2018. in fact he did his best to make sure he greased the wheels for Russia invading Ukraine. stealing and selling out the US is all Republicans know how to do, and johnson is a prime example.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.