KAMA FLOW study: potential of the Russian microelectronics market for investment
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published
Trillions of roubles, including capital investments by private investors, are needed to localise microelectronics production and increase output in Russia.
📊 Current market situation
Until 2022, Russia was heavily dependent on imports, the share of which reached 82%. In 2020, the volume of electronics production in Russia totalled RUB 1.1 trillion, which increased to RUB 1.45 trillion in 2022, according to ARPE. However, investment in the sector still lags significantly behind global leaders such as the US, EU and China.
🏛Government support and private participation
The national project for the development of the electronics industry in Russia plans to invest RUB 2.74 trillion, of which RUB 904 billion is to be attracted from off-budget sources. Nevertheless, these investments are not enough to reach the world level. In particular, the US has planned more than $300bn for the development of the electronics industry from 2021.
🚫The Russian electronics industry faces a number of challenges:
- Concentration of production facilities under the control of state corporations, which limits private business access to infrastructure.
- Dependence on foreign software for chip design.
- Restrictions on the purchase of element base and inaccessibility of advanced technologies.
However, we at KAMA FLOW are confident that the situation is not hopeless and with the right approach it is possible to capitalise on existing opportunities.
🌐 Key segments for investment:
Design centres, Fabless companies, CAD, IoT, telecom equipment, industrial automation, energy equipment.
🦾To maximise industry growth, a combination of several factors is required, including:
- A structured approach to investment in key segments, including through the creation of industry-specific private equity funds.
- Public-private partnerships to achieve meaningful results.
- Systematic work to build production and R&D projects, together with partners from friendly countries.
Conclusion - by consolidating the efforts of business and government, it is possible to create conditions for active growth of the industry and attract private investors to realise its potential.
For more details, see our research at https://t.me/kamaflow/642