Oil dollars pave way for high tech

Russia is taking in an estimated $500 million daily from crude oil exports and plowing a couple of day's worth into the domestic semiconductor industry.

In total, the government has announced plans to invest $650 million in high technology, according to the Semiconductor Equipment and Materials International (SEMI) organization.

Broad government projects include several tech parks and special economic zones that include favorable customs tariffs and reduced corporate taxes and office rents. The biggest beneficiary will likely be the Moscow area, specifically the suburb of Zelenograd.

Russia's two main chip makers, Mikron and Angstrem, are based in Zelenograd. Both use trailing-edge technology, but oil-based economic growth and government attention to microelectronics have attracted foreign technology partners. Later this year, Mikron expects to be producing mobile SIM ICs for the domestic market with German technology partner Giesecke & Devrient.

Russia is also converting to electronic passports, and Mikron is expected to mass-produce the ICs with the help of STMicroelectronics.

Angstrem is expected to receive government financial guarantees to back investment in upgrading technology. It is also rumored to be discussing a technology transfer deal with AMD that would bring 65-nanometer equipment to Zelenograd.

Further state investment is expected to go toward an advanced silicon fab for the Russian defense industry, and $1.5 million is earmarked for a photomask facility in Zelenograd.