ARPE asked to check the transfer of the processor developer Elbrus to the management of a competitor

The letter states that MCST JSC (which produces Elbrus chips) is a leading developer of microprocessors and that the company’s products “ensure Russia’s defense capability and are of key importance for <...> ensure the security of critical information infrastructure.”

The association asked Manturov to ask why they decided to transfer the promoter to the management of a company “which is controlled by private shareholders.” They also asked how the authorities would regulate the “conflict of interest between shareholders” of the two companies.

At the end of September it became known that the MCST had been transferred to external management. The Ministry of Industry and Trade explained the decision by the need to “ensure the stabilization of the state of society and the preservation of the architecture of Elbrus processors.” According to Vedomosti, the reason for the introduction of external control could be non-compliance with the state defense order.

A Kommersant source close to the government confirmed that MCST was having difficulty complying with government orders, threatening the company with bankruptcy. According to him, the problems will be resolved through the management powers of the Elvis Research and Production Center, there is no talk of conflict of interest or acquisition.

To fulfill its obligations to the State, MCST needs to redesign the chips that were sanctioned in early 2022, which requires time and funds that the company did not receive. At the same time, according to an interlocutor from the newspaper industry, Elvis also did not fulfill some of his requests.

Elvis founder Yaroslav Petrichkovich noted that all design centers face supply problems and reorganization may be associated with these difficulties. He added that Elbrus processors are not direct competitors of Elvis products and cooperation can be beneficial for both parties.

In recent years, MCST has received several sales offers from large Russian companies, but all transactions have not been carried out, Kommersant’s interlocutor on the microelectronics market reported.

• JSC MCST is under international sanctions. Until March 2022, the processor architecture and the Elbrus microprocessor family were produced by a Taiwanese company, TSMC. Due to sanctions, the developer had to move production to Russia.

• Last fall, Kommersant reported that Russia wants to develop a new Elbrus-B processor. Sources close to the MCST indicated that the design center has nothing to do with the project.