China Triples Price Of Microchips For Cards Of Russian Banks

Chinese companies took advantage of the situation.

Chinese manufacturers of bank card microchips have tripled the prices of their products for Russian banks since the beginning of 2023.

Currently, XH Smart Tech and Watchdata sell microchips for $0.9 (about 72 rubles) apiece, writes The Moscow Times.

According to them, Chinese companies have taken advantage of the situation in which Russian manufacturers of microchips for smart cards (bank cards and SIM cards) cannot meet domestic demand.

However, scarce Russian microchips cost banks and mobile operators even more. Their cost is 156 Russian rubles apiece. With such a price environment, it will be difficult for Russian cards on Russian chips to compete with Chinese smart cards, in the export of which China is interested, says Tatyana Dobrovolskaya, financial director of Novacard.

At the same time, the largest manufacturer of Russian microchips — the Mikron plant — cannot satisfy all demand and disrupts delivery times. In this regard, Aliot LLC (produces bank cards) on May 18 filed a lawsuit against Mikron in the Moscow Arbitration Court in the amount of 312 million Russian rubles, Kommersant notes.

The delay was caused by interruptions in the supply of production materials and the high workload of the enterprise, a source in the semiconductor market explained. Previously, Orenkart LLC has already filed a lawsuit against Mikron for 268 million rubles for non-delivery of 1.82 million microchips. However, the case was dismissed as the parties agreed to a postponement until November 30, 2023.

According to a source in the market, the Ministry of Industry and Trade is trying to agree on the possibility for Mikron to postpone the supply of microchips for bank cards in such a way as to prevent new claims against the plant.

“The delivery schedule has already been developed, meetings on it were held three weeks ago. Another meeting is scheduled for this week,” said the source of the publication. According to him, the Ministry of Industry and Trade plans to achieve a one-year postponement for Mikron. The department itself does not comment on this information.