PCB manufacturers ask the Ministry of Industry and Trade to drop mandatory raw-material localization: switching to domestic materials could raise prices 2–8-fold

Russian printed circuit board (PCB) manufacturers have sent a collective letter to the Ministry of Industry and Trade (Minpromtorg) asking it to relax the localization requirements for their products. The document, prepared by the Autonomous Non-Profit Organization "PCB Consortium" — an association that includes Yadro, GS Group, Rezonit, and Tekhnotek — is addressed to Magomed Kurbanov, General Director of the Federal State Budgetary Institution VNIIIR, and Yuri Plyasunov, Director of the Department of Radio Electronics Industry at Minpromtorg. In the letter, which Kommersant cites, the manufacturers point to a systemic shortage of domestic materials and warn that a mandatory switch to Russian raw materials could disrupt production timelines in the industry's peak fourth quarter, while the cost of components could rise two- to eightfold.

Logistical disruptions and shipment failures

According to the consortium, delays in raw-material supply are caused by sanctions-related restrictions that have disrupted established supply chains. The industry is already recording specific precedents: "shipment failures and deteriorating relations with customers," as the manufacturers themselves put it. A representative of Fplus, a company specializing in electronics production, confirmed that the fourth quarter traditionally accounts for the peak of PCB output, and a shortage of raw materials during this period could trigger a cascading failure of deadlines across the entire supply chain. Producing a single board requires a substrate and dielectric base materials, copper foil, chemistry for copper deposition, and a number of other components, and a shortage of even one of them halts the production line.

What the manufacturers are proposing: points instead of obligation

ANo KPP (the PCB Consortium) is asking Minpromtorg to remove the mandatory use of Russian materials in PCB production from the new requirements of Government Decree No. 719. Decree No. 719 introduces a points system under which companies earn points for using local components and technological processes; the accumulated score is required to have a product entered into Minpromtorg's registry of domestic radio electronics products. The current draft provides for points to be awarded precisely for the materials and raw materials used. The consortium proposes that, for a transitional period — until "at least three to five raw-material suppliers are available for each critical item" — the use of domestic materials be rewarded with additional rather than mandatory points. In the authors' view, this would avoid derailing production plans while still stimulating the development of a local supplier base.

Quality and origin of "domestic" materials

In a comment to Kommersant, Olga Kozhukhovskaya, General Director of ANo KPP, emphasized that more than 40% of the cost of a printed circuit board is made up of materials, and that the choice of specific raw materials is often dictated by the customer placing the order. Kozhukhovskaya also pointed to serious quality problems: a significant share of materials marketed as domestic is in fact based on imported raw materials and semi-finished products. Moreover, independent testing has recorded precedents in which the declared parameters of the raw materials do not match the actual ones. Suppliers that allowed such deviations have already been added to the register of unscrupulous suppliers. An Fplus representative added that Russian equivalents, in terms of price-to-quality ratio, do not yet meet modern standards, while Chinese boards and raw materials remain 40–60% cheaper than Russian ones.

Contradictory figures

Sources disagree on the scale of the price increase. The consortium's letter and Kommersant's materials speak of a two- to eightfold rise in material costs when switching to domestic raw materials. At the same time, in another Kommersant story (a piece on the possible 15–30% price increase for Russian electronics) and in the Fplus representative's assessment, Chinese equivalents are described as only 40–60% cheaper than Russian ones. The difference in the figures is explained by the fact that the "2–8 times" range refers to specific critical raw-material items for which local suppliers are virtually absent, whereas 40–60% is an averaged estimate across the full set of components. Nevertheless, for the end consumer, the final markup on finished electronics could, by industry estimates, amount to 15 to 30%, which makes the issue of raw-material localization not only a production problem but also a pricing one.

Context: why the issue has flared up now

The discussion of localization requirements for printed circuit boards is taking place against the backdrop of a general tightening of regulatory policy in the radio electronics industry. Decree No. 719 has become one of the key tools for stimulating import substitution: without inclusion in the registry of domestic products, companies lose access to a range of government orders and preferential terms. However, as the manufacturers' letters show, mechanically awarding points for "locality" without regard to the real capabilities of the raw-material base creates the risk that formal compliance with the requirements will be achieved at the expense of degraded product characteristics or higher costs. For an industry in the middle of a peak production cycle, this means a direct threat to competitiveness in the domestic market and a failure to meet obligations to customers.