Western components still used in Russia’s cyberwar efforts despite sanctions
Russia is experiencing strong growth in the data processing and storage center market, thanks largely to high demand from the public sector.
More than 50% of the data centers built in the country in 2024 were ordered by government-affiliated entities. These facilities are laying the groundwork for a “sovereign Internet” — i.e. a cyberspace free of foreign influence — while also providing for localization of user data and enhanced surveillance possibilities. However, as The Insider found out, key players in the systems integration and server solutions market depend on imported components from Taiwan, China, and South Korea. Server parts shipments go through shell companies with no website or phone number. On paper, the shipments are intended for Russian mid-range resellers, but the final customers are often bigger name players — which The Insider identifies in this investigation.
Who needs servers in Russia and why
The Russian data center market has been growing rapidly in recent years. From 2018 to 2022, its volume increased from $319 million to $820 million. One of the key reasons is Russia’s legal requirement to localize user data. Servers are also needed in order to block, filter, or censor certain content, to operate CCTV cameras, and to fulfill the requirements of the so-called “Yarovaya law” — a package of legislative amendments that oblige communication providers to save and store internet traffic data. According to the authorities, these measures should ensure stability and control over Russia’s cyberspace in the event of a disconnection from the global Internet — or after the deployment of a Chinese-style firewall.
State-owned data services provider Rostelecom is Russia’s uncontested leader when measured by the number of rack units ordered. Among the largest consumers of hardware are industrial enterprises, followed by the telecom and transportation industries, with private consumers lagging far behind. Government customers, such as mass media watchdog Roskomnadzor and state-owned companies like Rostelecom, account for almost half of the market. State-controlled Sberbank and other financial institutions also purchase vast quantities of servers. In addition, a significant share of private telecommunications companies are forced to purchase servers in order to comply with repressive laws, such as the aforementioned Yarovaya package. Meanwhile, some public-sector purchases are motivated merely by the requirement to replace foreign hardware with “import-substituted” equipment from the register of the Ministry of Industry and Trade.
Government customers, such as mass media watchdog Roskomnadzor and state-owned companies like Rostelecom, account for almost half of the server market
Still, Russia largely owes its surge in server capacity to the continued availability of foreign-made components, as even hardware manufactured in Russia depends on access to parts made abroad. In addition, the transition to new equipment, whether partially or fully Russian-made, is complicated by the need to ensure compatibility with existing hardware and software.
The servers on government-approved lists of “domestic products” are also assembled from foreign parts. Russian IT services and consulting company OCS Distribution estimates that in early 2022, when Russia launched its full-scale invasion of Ukraine, Western brands accounted for up to 80% of the country’s data center hardware. By 2024, the official share of servers and server equipment “assembled in Russia” among the company’s sales exceeded 50%.
According to business media outlet RBC, the Russian market remains dependent on imports, with 35,000 servers delivered to the country in 2024. The leading supplier is Telperien — a Slovakian firm specializing in low-end Chinese products. The company and its owner, Vladimir Pristupa, featured in a prior piece published by The Insider.
Where the parts come from
CPUs
Russia has yet to fully establish the domestic production of modern high-performance civilian chips. The Elbrus and Baikal CPUs were set to be manufactured by the Taiwanese factory TSMC, but it rejected the contracts due to sanctions. “Russian-made” servers still run on processors made by the U.S. companies Intel and AMD — this despite the official prohibition of such exports to Russia.
In fact, Intel, Altera, and AMD are the leading manufacturers of microprocessors and microcontrollers imported into Russia, and in 2024, Russia imported $13 million worth of CPUs manufactured by these companies. The key exporters to Russia are three Hong Kong-based shell companies: East Asia Electronics Trade Limited, QuantumFlow Limited, and Nexus Cloud Service Limited.
Another actor is the Thai company Exora, which advertises Intel and AMD products on its website, positioning itself as a “high volume Intel tray and boxed wholesale supplier.” However, Intel does not list this firm among its distributors in Thailand, and a name search on the Intel website does not return any matches. The company calls itself a “family-owned business,” but its founder is known only by his first name, Nikita. The Insider sent an inquiry to Exora but had not heard back as of the time of publication.
Despite its stated displeasure regarding the situation, the U.S. Senate has not responded with anything stronger than investigative reports making clear that it is fully aware of the American companies’ lax compliance efforts. But Serbian firm Kominvex also deserves our attention. It supplied Russia with flagship Intel Xeon processors of E, Gold, and Platinum series, which are either designed mostly for servers or have no household and office applications whatsoever.
Motherboards
Very few companies are trying to cut printed circuit boards and solder nodes and components onto them inside Russia. The two most visible exceptions are Yadro Fab Dubna and Norsi-Trans, but whether their attempts have been successful is hard to say.
Some people order “original” (that is, manufactured under a Russian trademark and possibly designed by Russian developers) motherboards in China. Most of Russia’s servers are produced under two models: Original Equipment Manufacturer (assembly from ready-made foreign components) or Original Design Manufacturer (development and production of components to order at foreign factories and assembly in Russia).
Another company that promised a full in-house development cycle is Gagarin. However, judging by its list of components, the company’s servers for 2022 run on Intel CPUs and Samsung memory modules.
In total, Russia imported $21 million worth of motherboards in 2024 — mainly from China and Taiwan and manufactured by Micro-Star, Asustek, and Giga-Byte. However, the leading exporters are not manufacturers, but bogey companies: Jin Tang Technology, the already mentioned East Asia Electronics Trade, Telperien, and Alburton Enterprises — a firm from the British Virgin Islands notorious for circumventing sanctions. One of Russia’s leaders in circuit board imports is the Far Eastern company Stotechno, an entity of the large retailer DNS Group. In the ranking of brands imported into Russia, Inferit ranks third, just after Micro-Star and Asustek.
The leading motherboard exporters are not manufacturers but shell companies
Particularly noteworthy are the shipments of products designed exclusively for servers. Such products include, for example, Taiwanese-made motherboards by the American corporation Supermicro, which the Chinese shell company Guangzhou Chiphome Information Technology supplied to the Russian firm Massive Tech (OOO Bolshie Tekhnologii).
Data storage devices
Data storage devices, another critical server component, are not produced in Russia at all. The Insider previously examined the development of domestic data storage systems designed for surveillance and control over cyberspace. These systems require fast, reliable, server-grade drives.
In 2024, the leading manufacturers of drives imported into Russia were Samsung, Huawei, Kingston, Hitachi, and Adata. Most of the imports were processed by Hong Kong-based shell firms, but it was a Slovakian company, Carovilli Trading, that topped the list. Carovilli Trading, along with the aforementioned Alburton Enterprises, Telperien, and Kominvex, has come under U.S. sanctions for helping Russia circumvent export restrictions, However, a variety of Hong Kong companies remain as major suppliers. The leading brand name, Samsung, was exported not by the manufacturer itself, but by Telperien, Jin Tang Technology, and another Hong Kong straw firm, Hystrone Technology.
Russia’s data storage market is controlled by a handful of players: six out of some 150 Russian importers of data storage devices account for more than half of the shipments. The most popular export strategy is to do business through shell firms with small export volumes. However, there are exceptions to this rule. Thus, Serbian companies Avala Informatika and Soha Info (currently under U.S. sanctions) imported more than $160 million worth of electronic components to Russia in 2023-2024, including products by Intel, Samsung, Lenovo, Logitech, HP, Cisco, Pure Storage, New H3C Technologies, AIC, AMD, Asrock, Western Digital, Toshiba, and ASUS.
The most popular export strategy is to do business through shell firms with small export volumes
The most noteworthy components supplied by these two companies are Taiwanese-made Adata drives, which may be intended for the creation of disk arrays used in data storage systems. Russia imported $8 million worth of these drives in 2023 and another $1.5 million worth in the first half of 2024. Russian customs data suggests that the aforementioned Serbian firms shipped drives to Russia from Taiwan and Hong Kong. Documents in The Insider’s possession reveal that the Taiwanese manufacturer entered into supply agreements directly with Avala Informatika and Soha Info. The Insider has submitted inquiries to these companies.
Among Russia’s leading importers of Adata drives in 2023 and 2024, two companies stand out: Forrat and Imkotreid. Both have an encryption systems license from the Federal Security Service (FSB).
The articles indicated in the customs documents show that at least 15% of the imported drives are from the ALEG and SLEG product lines. As the descriptions of these components on vendor websites and in tests suggest, they are mainly designed for use in server systems. The Insider sent an inquiry to Adata regarding its business with Russian manufacturers.
Key market players
“An important trend in the Russian IT market since the war began in 2014 has been its oligarchization,” notes Mikhail Klimarev, executive director of the Internet Protection Society. “Until then, a significant number of independent companies were trying to produce something on their own. Then Western partners began to leave, and state-owned companies became the main buyers. Supplies to private buyers did not allow small and medium-sized businesses to stay afloat because the volumes were insufficient.”
Virtually all server parts supplied to Russia end up in the hands of several major systems integrators. OCS Distributions and the Aquarius Group play a leading role in efforts to replace foreign industrial network and server solutions with domestic analogs. In addition, OCS has a close partnership with Tsifrovye Tekhnologii, a licensee of the FSB and the Federal Service for Technical and Export Control (FSTEC), which supplies cryptographic solutions for Russian state companies. OCS is also a partner of InfoWatch Group, a Russian developer of cybersecurity solutions (Natalia Kasperskaya’s company, which closely cooperates with Russian law enforcement agencies). In October 2024, the U.S. imposed sanctions on OCS, accusing it of supplying “data storage devices” to Russian government agencies.
Virtually all server parts supplied to Russia end up in the hands of several major systems integrators
Another prominent systems integrator is Yadro, which is believed to be affiliated with oligarch Alisher Usmanov and the X-Holding group of companies. The Unified State Register of Legal Entities does not disclose the founders of some of Usmanov’s entities. Withholding such information is a typical practice when dealing with “strategically important” organizations.
Yadro is Russia’s leading manufacturer of domestic servers for online content filtering and TSPU — traffic analysis systems that are used for slowing down YouTube and blocking Facebook. Yadro is also a key supplier of Deep Packet Inspection (DPI) hardware that can recognize and block traffic specific to VPN services.
To these ends, Yadro continues in its attempts to expand the production of printed circuit boards, nodes, and components in Dubna, a city near Moscow. But despite these efforts to develop domestic production, Yadro server specifications explicitly list sanctioned Intel components. Tekhnoserv (currently T1 Integration), Russia’s third-largest IT company by revenue, worked closely with Yadro as a distributor. Yadro’s partner OCS also sells its servers as part of comprehensive solutions.
According to customs data reviewed by The Insider, a total of $14 million worth of Taiwanese components for Yadro servers manufactured by Majestic Technology Corporation were imported into Russia between January and July 2024. These components include cases, chassis, debug modules, and integrated circuits for surface mount lines.
From January to July 2024, Russia imported a total of $14 million worth of Taiwanese components for Yadro servers
Another major player in the Russian server market is Fplus (formerly Marvel). The group of companies includes Fplus Logistics and Marvel Distribution, a major supplier and retailer of home appliances and electronics, which previously operated under the F+ and Accesstyle brands. Fplus’s co-owner is billionaire Oleg Barabanov.
Fplus and Yadro are Russia’s only quad-core server manufacturers. Moreover, these servers were presented at the Army-2023 defense industry forum. At the time, the company proudly reported its participation in the event, only to later delete the news. The Google cache preserved this information.
Army-2023 Forum
Fplus has also supplied hardware to military-patriotic education centers. The holding cooperates closely with Kaspersky, a cybersecurity vendor that works with Russian law enforcement agencies, on the development of software and hardware suites. Fplus is also engaged in the development of hardware for AI technologies. The Aurora operating system designed for “secure corporate smartphones” promoted by FPlus was presented by the holding at the Army Forum.
Server solutions are also supplied by systems integrator T1. This group of companies has been building data centers for Russia’s leading defense companies. T1 positions its solutions as replacements for Oracle and SAP products. The integrator also works with Yadro, Aquarius, and Aerodisk, as well as Kaspersky and InfoWatch. Special mention should be made of T1’s cooperation with Security Code, which is directly involved in the creation of Kontinent, a hardware and software encryption suite for remote control of Internet blocking systems. Additionally, T1 is advocating for the development of artificial intelligence and plans to produce drones (of the agricultural variety, at least for now) and electronics for them. T1 also has ambitions in space exploration and the development of electric and hybrid aircraft.
Among the customers of T1’s integrated solutions are the Border Guard Service of the FSB, state-owned media outlet Rossiya Segodnya, Rostelecom, Rubin Central Design Bureau of Marine Engineering, and Yakovlev Aircraft Company (formerly Irkut).
The structure of T1 ownership is convoluted and non-public, but the integrator appears to be wholly or partially controlled by VTB Bank. According to Mikhail Klimarev of the Internet Protection Society:
“The market has been split into spheres of influence: there are IT firms that cater to the military, and there are those that work for the SORM [System for Operative Investigative Activities] market and surveillance. On the other hand, this has resulted in the informal cooperation of specialists to find more efficient moves, in particular for importing components, and such business schemes were formed around these ‘oligarchic’ companies. It’s all very criminalized and prone to corruption.”
It is virtually impossible to trace the route of each hardware part from customs to the server manufacturer, and from the manufacturer to the system integrator. However, the oligopolization of both production and supply under government contracts makes it clear that components of a certain class — such as Intel Xeon Platinum 8458P processors, with a retail price of roughly $5,300, or Adata SLEG drives — are very likely to end up in Yadro servers, which will most likely be distributed by OCS or T1.
