Russian Microchip Production for Data Encryption for Ministry of Defense Delayed by Six Years

The Ministry of Industry and Trade of Russia fined the Avtomatika concern, part of Rostec, RUB 62.7 million ($812,300). The company was supposed to master serial microchip production for cryptographic protection of information for the Ministry of Defense.

The reason was a delay in fulfilling obligations under a state contract for more than six years, according to CNews.

The development contract was signed back in 2017, and its total cost was RUB 220 million ($2.85 million).

According to the documentation on the state procurement portal, the deadline for the third stage of work, which includes the manufacture of prototypes, was set for November 2019. However, as of the end of January 2026, the obligations remain unfulfilled, and the total delay is 2,262 days.

Several co-contractors are involved in the project: NIIMA Progress and the radio engineering concern Vega. At the current stage, Progress was supposed to supply electronic components, Avtomatika was supposed to manufacture and test the first samples, and Vega was supposed to release a trial batch of products.

The technical requirements for the microchip include a combination of two types of computing cores (for simple and complex commands). The device must also contain RAM with an automatic error correction function. The project planned to create a digital model of the microchip for its design on a computer.

Hardware-level cryptographic information protection tools ensure data confidentiality and integrity more effectively than software solutions. Such modules are in demand not only in the military, but also at critical information infrastructure facilities to protect technological networks. Abroad, similar systems are mass-produced by NXP, STMicroelectronics, and Texas Instruments.