Weekly Review of Russia's IT Sector: State-Driven Momentum in Microelectronics Meets Global Shortage

Bottom Line

This week is dominated by signals of unprecedented state-driven momentum for the development of domestic microelectronics, necessitating a revision of investment strategies in favor of companies involved in building production chains and import substitution of components. Simultaneously, the global shortage of memory chips, exacerbated by AI-driven demand, creates risks for the consumer segment and opens opportunities for specialized solution providers. Investors should increase exposure to stocks of companies related to electronics manufacturing and industrial automation, while hedging risks related to project implementation delays and rising costs.

Key Developments

1. Putin Orders Creation of Interagency Commission and Demands Acceleration of Microelectronics Decisions — President Vladimir Putin ordered the creation of an interagency commission on microelectronics to coordinate industry development and demanded "ultra-operational" decision-making, emphasizing the need to create a domestic electronic component base and achieve technological sovereignty. Portfolio implication: Expect increased budget funding and accelerated government orders for key microelectronics players. It is recommended to increase the portfolio weight of stocks of companies within the ecosystems of Rostec, Roselectronics, and other state corporations involved in import substitution programs, as well as their suppliers of specialized equipment and materials.

2. Construction of Three Microelectronics Plants in the Far East Announced — Deputy Prime Minister Yury Trutnev confirmed plans to build three new microelectronics plants (including printed circuit board production) in Primorsky and Khabarovsk Krais. The project aims to create the region's first full production chain and reduce dependence on foreign components, including for the defense industry's needs. Portfolio implication: The projects will create long-term demand for construction, logistics, and engineering services in the region. Investors should consider opportunities in stocks of companies linked to Far East development (within the framework of SPIC, advanced development territories), as well as suppliers of cleanroom equipment, PCB manufacturing, and quality control systems.

3. Global Memory Chip Shortage to Persist Until 2027, Driving Up Electronics Prices — Memory manufacturers Samsung and SK Hynix confirmed that the shortage of DRAM chips for consumer devices (PCs, smartphones) will persist until 2027 due to unmet explosive demand from the AI industry. Chinese suppliers have already warned Russian retailers of a 10-30% increase in procurement prices for smartphones by April 2026. Portfolio implication: Expect margin compression and potential sales volume declines for Russian consumer electronics retailers. Exposure in this segment should be reduced. Attention should shift to companies involved in device repair, refurbishment, and distributors capable of securing long-term contracts.

4. Sberbank Plans Mass Layoffs Using AI for Performance Evaluation — The largest private employer in the IT sector, Sberbank, announced plans to cut up to 20% of employees deemed inefficient based on artificial intelligence assessment. This is a landmark event, demonstrating a shift from pilot projects to large-scale operational optimization using AI. Portfolio implication: This signals the beginning of a new wave of cost optimization in the large corporate sector using AI solutions, which will stimulate demand for relevant software products and services. It is recommended to increase the share in stocks of companies developing corporate software for HR analytics, business process automation (RPA), and predictive analytics.

5. 34% Growth in IT Companies and Individual Entrepreneurs Accompanied by Record Bankruptcies — The number of active IT companies and individual entrepreneurs in Russia from late 2021 to 2025 grew by 34%, reaching 256 thousand. However, 2025 saw a record number of bankruptcies in the sector, indicating intense "natural selection" in the market. Portfolio implication: The market is undergoing a consolidation phase, where the most efficient players with strong products and customer bases survive. Focus should be on investments in large, financially stable IT companies with a diversified customer portfolio or in venture funds with strong expertise in startup selection, avoiding small and undiversified operators.

Sector Pulse

Risk Watch

• Delays in Implementing State Microelectronics Projects — Risk of missed deadlines for constructing new plants and implementing technologies due to difficulties in attracting private co-financing, logistics of supplying unique equipment, and personnel shortages, as has already occurred with the Ural Scientific Center "Microelectronics". Probability: Medium. Impact: High.

• Escalation of Cyberattacks on Critical Infrastructure — Growing threat of targeted attacks on Russian microelectronics plants and IT assets of strategic companies (as indicated in one news headline), which could lead to production stoppages, intellectual property leaks, and significant financial losses. Probability: Medium. Impact: High.

• Regulatory Tightening in the Digital Sphere — Risk of further restrictions, similar to the ban on cloud providers leasing IP addresses for VPNs, which could negatively impact the business models of some IT companies, especially in infrastructure and network services. Probability: Medium. Impact: Medium.

Outlook

Key events and indicators to monitor next week:

• Announcement of the composition and mandate of the interagency commission on microelectronics — a key indicator of practical steps and resource allocation.
• Publication of operational and financial results of leading Russian electronic component manufacturers (e.g., Mikron, Angstrem) for Q4 2025.
• Price dynamics for imported components and finished consumer electronics on the Russian market as an indicator of pressure from the global shortage.

Positioning consideration: Increase the share in stocks of companies benefiting from state programs in microelectronics (hardware, industrial controllers) and corporate automation (SaaS, AI), while maintaining diversification to mitigate the currency and raw material risks inherent in capital-intensive manufacturing projects.