Last autumn Russian president Dmitry Medvedev recommended state corporations to acquire innovative foreign companies to help build a Russian version of Silicon Valley.  The legacy Russian chip companies have tended to retain strong Communist traditions, with skilled engineers but inefficient management, older equipment, and weak marketing . Chips were traditionally designed at these companies for military purposes, and the designs have not kept up with the requirements of today's consumer-driven markets. 

Dmitry Medvedev

To bring Russia back into the 21st century, a Russian version of the "Silicon Valley" is to be created in Skolkovo near Moscow serving the interests of both the government and business.  The location in the Moscow region already has a top-level business school which was founded by leading Russian companies.  Already, 200 innovation companies operate in the region.

One of the targets of acquisition is the French silicon foundry, Altis Semiconductor.  Altis was originally conceived and funded as a joint project of IBM and Infineon Semicondutor in 1999.  The company  is located in Corbeil-Essonnes, France and employs about 2 200 persons. Its leading-edge technology offering includes advanced logic components down to 0.13 micron with Copper interconnects, eDRAM, mixed-signal and eFlash components.  In 2006, the organization underwent a radical restructuring to reduce from 1420 wafers a day to 1015.  Additional $22 million investment was made (more than $1.5 billion invested to date).

In 2007, Infineon and IBM had enough and decided to sell the French asset and announced a potential deal with Advanced Electronic Systems AG, a Swiss affiliate of Russian-based holding company Global Information Services (GIS). However, that deal fell through.  Earlier, a deal with Russian chip maker, Angstren, also failed because of the price of about $400 million was too high.  Meanwhile, Infineon was desperately seeking a buyer as it struggled with its own financial issues.

It is rumored that the Russians are taking another look at this high-tech prize -- most likely at a firesale discount.  In 2009, Sistema, a telecoms-to-oil conglomerate, considered buying a 51% stake in Infineon but the German government did not approve the sale. It is believed that Altis dropped its asking price by about 50% to unload the unit to Sistema.  Sitronics, which is one of Russia's important chip makers is part of the Sistema organization.  If the deal goes through it would give the chipmaker advanced technology and a foothold in the European markets.

Another bidder in the mix is RUSNANO.  The Russian Corporation of Nanotechnologies (RUSNANO) was in September 2007. The mission of RUSNANO is to advance Russia in the field of nanotechnology. The priority of RUSNANO is commercialization of nanotechnology projects with high business potential and/or social benefit. The company has about $5 billion under management, provided solely by the Russian Government.