By Ben Aris, Intellinews, 5/17/26

After the fall of the Soviet Union, Russia had a basic problem: having ignored investing into anything except military technology, the newly independent country found that nothing worked properly. All its technology and machinery was vastly inferior to their Western analogues. And it made no sense to invest millions of dollars in trying to catch up, as at the end of the day, the Western machines would still be better and cheaper than anything a Russian firm could produce. So for most of the last three decades by far the largest import category was machinery.

Sanctions changed all that. Extreme sanctions imposed following the 2022 invasion of Ukraine cut Russia off from even basic things like high quality printer paper, let alone sophisticated computer chips. Central Bank of Russia (CBR) governor Elvia Nabiullina warned businesses in a speech at the time that they should be prepared to go back “at least two generations” of technology if they wanted to keep their businesses going.

Fast forward four years and Russia is rolling out tech innovation after innovation to replace those imported machines it couldn’t make for itself. As IntelliNews reported, thanks to the collapse of the economy in 1991, Russia missed out on at least two revolutions in precision tool making which is at the heart of modern consumer and industrial goods production, left so far behind that it seemed almost impossible that it would ever be able to catch up.

Rosatom expands machine-building ambitions as nuclear orders surge

Russia’s Rosatom is best known as the state-owned nuclear corporation responsible for building and maintaining nuclear power plants (NPPs). Russia’s nuclear exports are booming as uranium is the new gas for Russia’s energy-linked foreign policy.

However, Rosatom is playing a second and probably more important role. It is positioning itself as a major machine-building group as demand rises for equipment linked to nuclear energy, Arctic shipping and industrial manufacturing, according to comments made by chief executive Alexei Likhachev at a congress of Russian engineering companies last week.

Likhachev said more than 200,000 people are now employed in machine-building production across its enterprises, as the government has yet another stab at doing something about its inability to make high quality machines.

Rosatom acts both as a customer and producer of heavy engineering equipment for sectors including defence, nuclear energy and industrial technology projects tied to Russia’s import substitution drive. The group also manufactures equipment for external customers in industries ranging from oil refining to liquefied natural gas. The idea is to learn by doing, and thanks to sanctions it has plenty of customers.

“The nearest horizon we see is 2040, which promises us an order for machine-building products worth around RUB25 trillion ($263bn),” Likhachev said during the congress of the Russian Machine Builders Union.

The nuclear sector remains the largest source of future demand. Under Russia’s General Scheme for the Placement of Electric Power Facilities until 2042, the country plans to construct 38 nuclear power units of varying sizes. Rosatom is also building reactors abroad, with projects under way in Bangladesh, Turkey, India, China, Hungary, Egypt and Uzbekistan.

Likhachev said Rosatom had also reached agreements on future nuclear power plant construction in Rwanda, Vietnam, Myanmar and Kazakhstan, underlining Moscow’s efforts to preserve influence in global nuclear markets despite Western sanctions targeting parts of Russia’s energy sector.

Rosatom’s engineering operations also support Russia’s expanding nuclear-powered icebreaker fleet. The Baltic Shipyard is currently constructing the nuclear icebreakers Chukotka, Leningrad and Stalingrad, vessels considered central to the development of the Northern Sea Route through the Arctic.

Beyond nuclear infrastructure, Rosatom manufactures spiral-wound heat exchangers for LNG production, equipment for oil refineries, battery cells, radiopharmaceuticals and medical technology. The corporation has also expanded training programmes, opening engineering classes and operating 12 colleges in Russia’s nuclear cities. Annual graduate recruitment has increased from 1,300 to 5,400 over the past decade, according to the company.

Aviation catching up

Aviation was one of the sectors that was hardest hit by sanctions. Again, the massive Russian plane-building sector built up in Soviet times was stuck in the past and unable to manufacture the nuts and bolts spare parts needed to keep the fleet in the air. During the boom years, like in the power sector, Russia had largely bought the cheaper, but higher quality foreign-made planes. Cut off from spare parts by sanctions, companies were forced to ground aging planes and started to cannibalise them to keep the rest in the air.

Now Russia is preparing to begin deliveries of domestically produced passenger aircraft as Moscow pushes to reduce its dependence on Western aerospace technology thanks to progress in domestic manufacturing capabilities.

The first import-substituted SJ-100 regional jets equipped with Russia’s PD-8 engines are expected to be delivered to airlines by the end of 2026 or in the first quarter of 2027, according to industry officials and state media reports. Certification of the PD-8 engine has been completed, with aircraft and engine approvals expected to be synchronised before deliveries begin.

The SJ-100 programme, developed by the state-owned United Aircraft Corporation, is central to the Kremlin’s strategy of replacing foreign-made components previously sourced from suppliers in Europe and the US.

In the medium-haul segment, the Tupolev Tu-214 received certification in December 2025 and deliveries are scheduled to begin in 2027. Red Wings will become the first operator under a firm leasing agreement covering 11 aircraft financed through Russia’s National Welfare Fund.

But production volumes remain limited. The Kazan Aviation Plant is expected to assemble three Tu-214 aircraft in 2026, up from a rate of one or two aircraft annually in recent years. However, United Aircraft Corporation has secured preliminary commitments for 100 Tu-214s from Russian carrier S7 Airlines, with deliveries due to start in 2029.

“The entire lineup — from short-haul to medium-haul — is converging at a single point in time,” the report said, describing the emergence of “a fully independent ecosystem”.

 “Russia has managed to do what no one in the world has been able to do for decades: displace the US in their monopoly in critical avionics,” the report said.

The effort contrasts with China’s approach to aircraft development. While China’s COMAC has advanced production of the ARJ21 and C919 passenger jets, both programmes continue to rely heavily on Western suppliers, including engines produced by CFM International, the joint venture between GE Aerospace and Safran. One of the only deals that US President Donald Trump was able to strike during his trip to Beijing last week was the sale of 200 Boeing jets to Beijing – and even then the market was disappointed as they were expecting 500 planes to be sold.

One of the biggest innovation is Russia has developed its own engines, the most complicated part of plane-making. The fully indigenous PD-8 engine for the Superjet has officially passed all certification tests. This involved: 

-Over 6,500 hours of gruelling real-world and lab testing completed.

-Extreme icing tests (ground rig at CIAM + in-flight over Arkhangelsk).

-150-hour endurance runs simulating years of heavy operation.

-Bird strike, water ingestion, and fan blade failure trials.

-Full hail cloud simulation.

-And dozens more brutal certification tests.

Russia is building its own future in civil aviation, completely independent of Western supply chains.

“Russia — a slower, but autonomous trajectory,” the report said. “In the long run, the second model gives a strategic advantage.”

Microchip factory

One of the lack of technology’s hardest tells is the weakness in Russia’s missile production: it is still heavily dependent on Western microelectronics for much of the guidance and control systems, but that is changing too.

In the first few years of the Ukraine war, 95% of the electronics in captured unexploded Russian missiles was Western-made, but last year a captured decoy drone was discovered that was almost totally made up of Chinese electronics. Chinese tech has also been making rapid progress. Likewise, during last year’s war with Israel, Iranian drones relied on the US-controlled GPS satellite network for guidance, making them vulnerable to Israeli electronic warfare (EW) countermeasures. This year, Iranian drones have changed over to China’s BeiDou satellite navigation system, negating Israel’s ability to spoof inbound drones that have been doing devastating damage as a result.

However, it seems that Russia is finally overcoming this hurdle too. Russia has just unveiled its first domestically produced photolithography machine, the Progress STP-350, in a move aimed at reducing dependence on foreign semiconductor equipment amid western sanctions.

The system is designed to manufacture 350 nanometre chips, a generation far behind the most advanced processors used in consumer electronics but one that remains relevant for military and industrial applications. Larger transistors are generally more durable and can operate in conditions that would damage cutting-edge chips.

Russian developers said the chips produced by the machine are resistant to radiation exposure, electromagnetic pulse attacks and extreme temperatures, making them suitable for defence systems, aerospace equipment and critical infrastructure. The components are also designed to withstand vibration and operate at higher voltages of up to 100V, capabilities valued in military hardware and heavy industry.

The launch reflects Moscow’s broader effort to localise semiconductor production after export controls imposed by the US and its allies restricted access to advanced chipmaking tools. Russia has struggled to develop domestic alternatives to highly specialised lithography systems, a market dominated globally by companies in the Netherlands, Japan and the US.

While the Progress STP-350 does not compete with the sub-10 nanometre technology used by leading global chipmakers, analysts say mature-node semiconductors remain strategically important because of their reliability and resilience in harsh operating environments.

These are very large chips compared to the 7nm chips used in today’s smart phones and highlight how far Russia remains in the microelectronics industry, but they are sufficient for use in missiles and many other consumer electronic goods production. By comparison, China is now capable of making 12nm chips and recently announced it was able to make commercially viable 7nm chips.

From cheese to turbines

Sanctions have sparked heavy investment into innovation that is starting to bear fruit. It all started with the famous complete disappearance of European cheese from Russian supermarket shelves after Russian President Vladimir Putin imposed tit-for-tat sanctions on EU agricultural goods in 2014 following the annexation of Crimea.

Cheese suffered from exactly the quality/cost problem, but as Russians were cut off from their favourite cheeses, one woman flew to Paris to buy the cheese moulds and started to produce Siberian camembert. Likewise, the patriotically named Koza Nostra firm began to produce very decent Russian goat cheese. (Koza is Russian for goat, so the company’s name roughly translates into “Our Goats”.) Within about two years after the sanctions were imposed, Russia had its own flourishing domestic cheese industry.

Closing the gap on gas turbines was an altogether more daunting task. German engineering firm Siemens had a total monopoly on high efficiency gas turbines during the upgrade of the Russian power sector during the boom years of the noughties. Russian technology couldn’t come anywhere close to Germany’s high precision engineering these turbines rely on as a result of the missing precision tool industry.

The Russian engineering giant Siloviye Mashiny (Power Machines), owned by sanctioned oligarch Alexey Mordashov, had a joint venture with Siemens and was trying to develop a domestic equivalent, but that effort was stymied after Siemens was reluctantly forced to withdraw from the Russian market.

However, as IntelliNews reported, last year specialists from the United Engine Corporation (UEC), part of the Rostec State Corporation, completed testing of the second prototype of the new AL-41ST-25 industrial gas turbine engine in Ufa, Republic of Bashkortostan, that is almost as good as anything Siemens makes.

It also appears that there has been a technology transfer between Iran and Russia, which has been under a similar extreme sanctions regime for even longer than Russia and has likewise innovated. Last September Iran delivered high efficiency gas turbines to replace Russia’s Siemens gas turbines that were on a par with the German maker’s quality.

Military hardware

With military hardware, Russia has kept its Cold War edge in developing innovative weapons. Iran played a key role here too, as before the war in Ukraine started it was already a world leader in drone technology, sparked by reverse engineering a crashed US drone in its territory.

Following the invasion of Ukraine, Iran sold hundreds of millions of dollars worth of drones to Russia, but in 2025 there was a technology transfer deal between Moscow and Tehran and Russia built its own drone factory in the Alabuga Special Economic Zone in Tatarstan. Since then Russia has taken drone technology forward with things like the new Geran-5 jet propelled drones. Some of these innovations have also been showing up on the battlefield in the Gulf war, suggesting the CRINK alliance (China, Russia, Iran and North Korea) are increasingly sharing military innovations with each other.

More generally, both Russia and China have run far ahead with a family of super weapons. Most importantly is the family of hypersonic missiles that can penetrate any US air defence and is a class of weapons America does not have yet. Since 2018, Putin has rolled out several more groundbreaking super weapons, including the Oreshnik cruise missile that can hit any capital in Europe, the “unstoppable” Poseidon nuclear torpedoes, which were just deployed last week, and most recently the super heavy Sarmat cruise missile, the biggest ever made that can hit any target on the planet. America and Europe are currently defenceless against all these weapons, experts say. At the same time, Russia has ramped up its drone production to over 7mn units a year, whereas the US cheap drone equivalent is still in its pilot development phase and Europe has no large-scale drone production at all.

The same thing happened in China 

During his trip to Beijing last week US President Donald Trump offered to reverse CHIPS, the Biden-era US ban on exporting top flight microchips to China, but Chinese President Xi Jinping refused the offer, as in the meantime, China has developed its own equivalents.

The CHIPS ban was supposed to stymie Chinese tech development and ensure that the US stayed at least one, if not two, generations ahead in the race. But according to a report by the Federal Reserve Bank of New York, the export controls backfired in spectacular fashion.

“The US has imposed export controls to deny China access to strategic technologies [but] we find no evidence of reshoring or friend-shoring. As a result of these disruptions, affected suppliers have negative abnormal stock returns, wiping out $130bn in market capitalisation, and experience a drop in bank lending, profitability, and employment. [US firms’] total number of customers declines, potentially inflicting collateral damage upon the same US firms whose technology export controls are trying to protect,” the report said.

What happened was the reverse: it forced a consolidation of a fragmented sector and a massive investment impulse that has seen Chinese technology race ahead and is now increasingly displacing the US from the lead in sector after sector, starting with green energy tech and EVs. China has gone from a net importer of technology to a net exporter in the last few years.