Russian Supplier of Military Microelectronics Halts Operations

Optron-Stavropol, an enterprise that manufactured microelectronics for the Russian military-industrial complex, has ceased operations in Stavropol.

According to The Moscow Times, the company is on the verge of bankruptcy: its accounts have been seized, and it has accumulated significant debts on taxes, wages, and utility bills.

The company’s main products are power semiconductor components used in avionics, including the MiG, Tu, Su, Sukhoi Superjet and MS-21 systems.

According to the company’s general director, Alexander Bondarenko, the cost of one such element is 5,000 rubles, but the Russian Defense Ministry sets the price at 2,600 rubles.

In 2023, the plant incurred losses of 102 million rubles, and in 2024 it already lost 149 million. “The company cannot cover its expenses and is forced to cut staff,” Bondarenko said.

According to the Russian law on the State Defense Order (SDO), the price of products is set by the military.

“The Ministry of Defense requires that the costs included in the price be reduced as much as possible, and representatives of the military often abuse this, which results in unprofitable production,” explained Alexey Novoselov, CEO of PKK Milandr.

The company cannot refuse to participate in the state defense procurement, as this could result in the loss of contracts and sanctions from the government.

According to Bondarenko, nine meetings have been held after appeals to the Ministry of Industry and Trade, and an inspection by the Russian Prosecutor General’s Office has been scheduled. However, the situation has not yet changed.

The problems at the plant have been going on for many years. The company has been teetering on the brink of collapse since 2016, and in 2021 it already warned of the risks of closure and reduced staff. That year, the volume of contracts barely reached several tens of millions of rubles.

In the past, the plant supported the so-called “tail technologies” for the defense industry, which are outdated from a market perspective but necessary for military needs.

“Perhaps it is still possible to keep the staff and technological equipment. But I’m afraid that it would be easier and more profitable for the shareholders to sell the plant’s real estate,” said Ivan Pokrovsky, director of the Association of Russian Electronics Developers and Manufacturers.

The fate of the company remains uncertain. Its closure could deepen the crisis in the Russian military microelectronics industry, which is already under severe pressure due to sanctions and problems with import substitution.