Putin's favorite physicist derailed the development of Russian processors
The Russian Ministry of Industry has fined the Kurchatov Institute Research and Development Center (NDTSI) 110.4 million rubles for failing to meet the deadlines for developing microchips intended to replace their American counterparts.
The Kurchatov Institute is headed by Mikhail Kovalchuk—the brother of Yuri Kovalchuk, the majority shareholder of Bank Rossiya, which is often referred to as “Putin’s friends’ bank.”
The contract, worth 544.6 million rubles, was signed in November 2017 as part of the state program “Development of the Defense-Industrial Complex.” Information about this appeared in government procurement documents. The company was tasked with developing and launching production of two types of microchips to replace American chips from Intel, Integrated Device Technology, Marvell Technology, and Broadcom. These components are used in data storage and high-speed switching systems and are considered critical to defense and industrial infrastructure. The planned completion date was November 2019, but the project was actually delivered late, in August 2020.
This is the second major fine the Kurchatov Institute has received recently. In the spring of 2026, the Ministry of Industry and Trade fined the institute 303 million rubles for missing the deadline to develop a microprocessor intended to replace Intel’s solution for compact military-grade onboard computing devices. The contract, worth 900.9 million rubles, was signed back in 2016, and production was supposed to be up and running by November 2019, but the process was not completed until September 2023.
Problems with contract fulfillment in the Russian microelectronics industry are systemic in nature. In March 2026, the Ministry of Industry and Trade began sending mass notifications to manufacturers regarding the imposition of large penalties for missing deadlines on projects under the defense industry development program. According to available data, in April 2025 alone, the total amount of fines imposed on companies for failing to meet their obligations exceeded 500 million rubles.
This was reported by The Moscow Times.
Previously, the Russian Ministry of Industry and Trade imposed a fine on theresearch center “Kurchatov Institute” in the amount of 303.1 million rubles for years of delays in developing a microchip intended to replace American Intel processors.
Russia wants to double the service life of its old Superjet aircraft due to the failure of its aviation program.
