A Russian state-owned company is negotiating to buy equity stakes in Chinese semiconductor plants, aiming to secure production capacity abroad because domestic chipmaking technology still cannot meet demand, The Insider reports.

The plan marks a shift in Moscow's semiconductor strategy. Rather than expanding Russian fabrication at home, the state company wants to own shares in working Chinese fabs — effectively renting capacity through ownership — and route chip production through China's mature manufacturing base.

Why buy into Chinese plants instead of building at home?

Russia's domestic semiconductor program has struggled since Western sanctions cut off access to advanced equipment, materials and EDA software. The country's flagship fab project, Mikron, and related efforts remain stuck on legacy process nodes far behind leading-edge manufacturing. Building new capacity in Russia would require lithography and deposition tools that Dutch, American and Japanese export controls now prohibit selling to Russian buyers.

Chinese fabs, by contrast, continue to operate and expand mature-node capacity using domestically sourced and stockpiled equipment. Buying a stake in such a plant would give the Russian state a claim on wafer output without needing to import forbidden machinery directly.

The Insider did not name the specific Russian state company involved, the Chinese plants targeted, the size of the stakes under discussion, or the deal values. The report characterizes the effort as a response to lagging domestic technology rather than a confirmed transaction.

What would equity stakes actually deliver?

An ownership position in a Chinese fab would not transfer technology to Russia. It would, however, guarantee allocation of finished chips or wafers — a meaningful advantage for Russian defense, industrial and consumer electronics makers that now source components through intermediaries at inflated prices.

The approach carries clear constraints:

• Chinese fabs risk secondary sanctions if they serve sanctioned Russian entities directly
• Any deal would likely route through non-transparent intermediaries to obscure ownership
• Equity stakes give capacity rights, not process know-how or equipment access

Chinese authorities have tightened scrutiny of semiconductor transactions involving sanctioned states, and Beijing has an interest in preserving access to Western tools and markets. That tension will shape whether any stake purchase can close, and at what discount to secrecy.

How does this fit Russia's broader chip strategy?

Moscow has publicly prioritized import substitution in electronics, with officials repeatedly promising domestic production growth. In practice, Russian chip output remains concentrated on trailing-edge nodes, and the design sector depends heavily on foreign IP. Sourcing capacity in China acknowledges that gap rather than closing it.

For Chinese foundries already facing oversupply pressure in mature nodes, an additional buyer — even a politically awkward one — represents demand. Whether that commercial logic outweighs sanctions risk will determine if talks progress from stake discussions to signed deals, and whether Russia secures capacity only through covert intermediaries instead.

The Insider's reporting suggests the negotiations are ongoing, with no announced timeline, valuation or counterparty.