After a month’s notice to customers in Russia, Intel has finally suspended all operations in Russia in retaliation to the invasion of Ukraine by Putin. What did Intel specifically announce, what does this mean for Russia, and will companies return to Russia?

What did Intel specifically announce regarding Russia?

No word can describe the atrocities currently ongoing in Ukraine. As the Russians pull out of northern regions, evidence of mass graves, torture, and brutality unseen in Europe since WW2 is now being unearthed. All around the world, countries are denouncing the actions of the Russian forces, many are asking for war crime charges against Putin, and some have even asked for a regime change in Russia (I said it, we are all thinking it - President Biden).

While governments have placed sanctions on Russia as well as freezing many Russian assets, private companies are also responding to the war in kind. The most common action by far by companies is the outright closure of shops and offices, which denies access to shoppers and their services. Despite the shutdowns, many of these companies continue to pay their employees in Russia, which is arguably a fair thing to do considering that it is not the employees who are at fault.

Amongst these companies, Intel is one who stated a month ago that they would be stopping all sales of components to Russian customers. Fast forward tooday, Intel has kept its word and has now closed in Russia to customers. But not only are product sales banned, even Intel offices in Russia are currently closed, but employees continue to be paid. Considering that there are over 1200 Intel employees in Russia, this is a sizeable number of staff no longer working while still being paid.

But it is not just Russia that is affected; customers in Belarus have also been blacklisted by Intel. The close relationship between Belarus and Russia makes Belarus an ideal secondary target by countries worldwide. Russia has very few allies, and those allies would be able to ship essential equipment back to Russia, including semiconductors.

What does this western pull-out mean for Russia?

It is blindingly obvious that the worldwide reaction to Russia is seeing their economy significantly hurt, but the effective dictatorship by Putin, along with the restricted freedoms given to the population, is also seeing a brain drain. Thousands upon thousands of the country’s brightest minds are looking to leave Russia (or already have done so), hoping that they will be able to make the most of their skills elsewhere.

If Russia doesn’t take their current situation seriously, this brain drain will rapidly lead to an inability to produce cutting-edge devices and develop new research and discoveries. Combined with the inability of Russia to access semiconductors around the world due to sanctions, the result is a Nation that quickly falls behind in technological progress. Considering how poorly equipped the Russian army has demonstrated to be, such a brain drain may even lead to a severely weakened national defensive capacity.

Will companies return to Russia?

This is a tricky question to answer, and Russia pulling out of Ukraine does not guarantee the lifting of sanctions, nor does it see companies reopen their doors. If Russia had fought Ukraine on fair terms (targeting soldiers, destroying military equipment, leaving civilians alone), then the world would have been sympathetic to a tactical retreat, but the horrors being uncovered in Ukraine by Russia are unforgivable by many. As such, it may take a military coup or new leadership based on an actual democratic process to see sanctions lifted, as those currently in power are mostly seen to be responsible for what is going on in Ukraine.

Regarding companies like Intel, their return largely depends on the socio-political environment. For example, Intel may want to move back to Russia to expand its business, but it could draw negative public attention. A few angry tweets from the wrong individual could see Intel’s popularity tank. Governments worldwide may even blacklist Russia, making companies returning even more challenging.

It is clear that Russia has failed in its invasion of Ukraine, but the war is not over yet. It cannot be said for sure if companies will return to Russia, but what can be said is that there are more horrors to come. Russia’s access to western technology will be in a severely limited capacity for the foreseeable future.