Russia-West: is it possible to exchange Russian gas for microchips?

The United States is seriously talking about the possibility of banning the supply of microchips to Russia "in the event of an escalation in Ukraine”. The sanctions relate to the products of any companies where there is participation of American capital (equipment) or American rights (Intel and AMD are American companies holding respectively more than 70% and 20% of the global processor market in different frequency bands).

And although the Americans have dumped all production to Asia, and they themselves are exclusively engaged in development, nevertheless, even in Taiwan, Singapore, South Korea, China and Europe, it is difficult to find a production site where there will be no American machines (in the production of microchips, the main thing is not the place of stamping, but the development of design code), and American brands are on the finished products.

The machine park in each manufacturing country is mixed, since microchips are the most globalised industry, which at the same time requires mass production due to the huge capital intensity of the equipment. However, due to high robotisation, Asian cheap labour is a decisive factor in the competition.

Therefore, the West brought everything to Asia, working on the principle of "your gasoline for our ideas". Formally, the United States will have plenty of opportunities to cling to any manufacturer of microchips if they decide to declare a sanctioned semiconductor blockade to Russia.

It is because of the high cost of equipment that the whole world buys microchips from several manufacturers who invest huge sums here. On small volumes, their microchips are unprofitable. Russia also orders its microchips (for Baikal and Elbrus processors) in Taiwan.

In general, the United States itself owns only 6% of the global microchip market. Taiwan has almost 25%, Singapore and South Korea have 11% each, and China has 10%. The Europeans are just setting up production at home, anticipating problems in Taiwan, and the United States is doing the same.

In any case, Russia is vulnerable in this area, since even orders of microchips in China can fall under American claims. Theoretically, of course, one can try to get around them, but there will be a lot of trouble and problems for everyone - both sellers and buyers.

It will take a long time to wait for China to enter semiconductor sovereignty: they will create a production base by the end of this year, and dependence on technology will remain for a long time. China does not yet have its own science in the field of microchip production at the level of American technological leaders.  

If such a microchip blockade happens for Russia, the blow will be dealt not only to our space industries, but also to the entire global business: automotive, computers, household appliances, aircraft construction (in Russia, a huge fleet of American aircraft is leased). All these companies will have to leave the Russian market and receive a crushing financial blow.

And if we consider that the shares of these companies are in the investment portfolio of such major investment banks as Chase Manhattan Bank, a subsidiary of JPMorgan Chase, US investment and pension funds such as the Vanguard Group and Blackstone Group, then the decision on a microchip blockade will be the strongest blow to the owners of American money. Now such a decision could not be more inopportune for the financial giants of the United States. Supply chains will collapse around the world even more and the crisis will strangle the initiators of these sanctions.

But given the degree of psychosis of the American establishment and domestic political problems in the United States, even the most obvious counterproductive solutions such as Russia's sanctions on microchips cannot be ruled out. How will Russia respond in this case?

According to Bloomberg, it became clear that there is no alternative to Russian gas in Europe. Azerbaijan with its 10 billion cubes of export volume does not solve any problems in Europe. It is for this reason that the Nabucco gas pipeline "did not take off": Russia does not allow Turkmen gas, and therefore it has long gone to China, Iran is always under sanctions, and without them, Azerbaijan's share is nothing. Accordingly, the American project "Georgia", which has now been transferred to the reserve anti-Russian resource mode, "did not open fire" either.

Qatar cannot leave the Asian market with its LNG. This will not only hit Qatar, but also cause the collapse of Asian markets, which will bury the American and European economies. The US also cannot leave Asian markets for the same reason. As a result, they are torn between Asia and Europe, as a result of which it turns out that neither green energy, nor the Qatari-American LNG, nor the falling capacity of Norway, European problems do not close.

And it would be fine if we were talking only about the uncompetitiveness of the European industry, which will simply be outbid by American TNCs, after which they will allegedly pump up their gas and adjust this market only for themselves. We are talking about the threat of famine in Europe: because of gas prices, European producers of nitrogen fertilisers are unprofitable and bankrupt. This is no longer a market, but a cemetery, and in this form, Americans do not need this asset.

It turns out that with all the wealth of choice, Europe has no other alternative than Gazprom. The gas market turned out to be a myth. If Russia is "disconnected" from microchips, Russia will turn off Europe's gas in response, because this will be the very situation when there will be no other answer.

Taking into account all the cumulative damages, such a decision looks like suicide for the United States. At least simply because NATO will crack along the line of the Oder River: Poland will remain "ready for anything for Russia" to the Vistula, but from the Oder to the Seine and further across the Channel to England, scandals will begin such that Europe risks leaving the US sphere of influence. And this may cause an acute political crisis in the United States itself. The United States will come out of this crisis not only fairly plucked, but actually defeated. 

It will be possible for Russia to compensate for the losses of the collapse of the USSR in the post-Soviet space in one leap. The decision on sanctions on microchips against Russia has so many contraindications that it is even difficult to say whether to be afraid of them or to wish for their speedy introduction.

Given the cognitive problems of the current American ruling class, which is literally in a panic from sudden changes in relation to the seemingly forever defeated Russia and financially dependent China, we can expect the most emotional solutions.

The US political class is split and fragmented at an alarming rate, so it is already unclear who will make the decision at the last moment and what it will be. By 2024, the situation will only get worse, and therefore no option can be ruled out for Russia. In any case, we should prepare for the worst and inappropriate behaviour of American "partners".

The US has become hostage to its previous decisions, and each next step is worse than the previous one. This trend will continue for a long time, at least until the final loss of the US status as the centre of the unipolar world. And if the US decides to ban the supply of microchips to Russia, the rate of disintegration of the unipolar world will accelerate manyfold.