From Toilets to Semiconductors... '100 Days of Ukraine Invasion,' Russia Has Lost Everything

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As it marks 100 days since Russia launched airstrikes on Ukraine, Russia, which has been sanctioned by Western countries including the United States and Europe, is experiencing shortages ranging from toilets to semiconductors. As the war prolongs, supply of various goods is becoming difficult due to sanctions, and inventories piled up in warehouses are running out, causing prices to soar.

The Wall Street Journal (WSJ) reported on the 2nd (local time) that "As sanctions (by Western countries against Russia due to the Ukraine airstrikes) begin to hit consumers hard, inventories are gradually decreasing," adding, "Russians are paying high prices for some items or seeking substitutes."

According to the report, at Russian airports, equipment used to inspect passengers and luggage has reached the end of its lifespan but cannot be replaced, and stores are facing shortages of washbasins, toilets, and sinks, causing prices to surge. Movie theaters are unable to receive new films and are re-screening old Hollywood movies or Soviet-era films. WSJ reported that a theater owner in the Ural and Western Siberia regions of Russia said that since February, attendance has dropped by 70-80%.

This situation is also impacting Russian companies that need to procure semiconductors and equipment. In particular, export restrictions on technologies that can be used simultaneously by businesses and the military, such as semiconductors and servers, are expected to affect the Russian economy. According to a foreign media report, Russian telecom groups are unable to obtain 5G equipment, and Yandex, known as "Russia's Google," along with Sberbank, Russia's largest bank, are facing difficulties expanding their cloud computing products and data center services. An executive from a semiconductor company in a Western country explained, "The supply chain for everything from servers to computers to iPhones (in Russia) has disappeared."

Currently, major semiconductor companies such as Samsung Electronics, U.S. Intel, Taiwan's TSMC, and U.S. Qualcomm have all stopped semiconductor exports to Russia. Although Russia has semiconductor companies like JSC Mikron, MCST, and Baikal Electronics, their technological capabilities are inferior, and Russia has been heavily dependent on foreign companies such as Intel, China's SMIC, and Germany's Infineon. MCST recently announced it is exploring production at a Russian factory owned by JSC Mikron. However, last year, Sberbank evaluated that the Elbrus chip experiment developed by MCST was a complete failure, so expectations for semiconductor substitution through this are not high.

As the situation worsened, the Russian government announced in early last month that it would exceptionally apply trademark law, allowing imports of electronic components from Intel, Siemens, and others, as well as industrial goods and textiles, through third countries. Ivan Pedyakov, CEO of St. Petersburg consulting firm Infoline, told WSJ, "The government is trying to mitigate the shock, but that is the best they can do," adding, "They will not be able to reverse the situation, and economic slowdown and reduced consumer spending caused by this are inevitable."

This content was produced with the assistance of AI translation services.