Potential chip entrepreneurs in Russia were being deterred by their mistrust of government funding and by the reluctance of foreign investors to invest.
“The scientific community is ahead of the government in understanding what needs to be done. They travel, they talk to venture capitalists, they understand the issues surrounding start-ups. But people who have a choice do not take government money,” Jack Barbanel, founder and CEO of the Strategic Investment Group, told the SEMI ISS Conference in Moscow in 2005.
“They take money from foreigners,” added Barbanel, “but entrepreneurs are afraid that if they take government money, the government can take away what they create.”
With Russian GDP growing at six per cent annually, at that time,and the government running both budget and trade surpluses, as well as paying back government debt early, there was no shortage of money to invest. The government had set up a body called the Russian Electronics Corporation (REC) to direct investment into the sector.
“The Russian Electronic Corporation hasn’t achieved anything,“ said Barbanel. “It’s sitting on money, not investing it.”
In response, Alexander Kalinin of the REC said: “The new privatised owners are hesitating to invest. There is no technology transfer to Russia, Russia still needs outside expertise. IC designers are not designing advanced circuits and Russia needs an OEM industry if the semiconductor industry is to succeed.”
However, another speaker from the REC, Pavel Kruzhilin, pointed out that Russian IC designers were competitive with the best in the world when given the chance to build advanced ICs.
Asked by Electronics Weekly why, in that case, there was no significant fabless chip industry in Russia, Kruzhilin replied: “There is no reason why there should not be a significant fabless industry in Russia. I hope in five years time it will be a totally different story.”
