VZCZCXYZ0000
PP RUEHWEB

DE RUEHMO #3074/01 1761307
ZNR UUUUU ZZH
P 251307Z JUN 07
FM AMEMBASSY MOSCOW
TO RUCPDOC/USDOC WASHDC PRIORITY
INFO RUEHC/SECSTATE WASHDC 1548
RUEAORC/USCBP WASHDC
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS MOSCOW 003074 
 
SIPDIS 
 
SIPDIS 
 
USDOC FOR 532/OEA/MHAMES/LRITTER 
USDOC FOR 3150/USFCS/OIO/CEENIS/MCOSTA 
 
E.O. 12958: N/A 
TAGS: BEXP ETRD ETTC RS
SUBJECT: EXTRANCHECK: PRE-LICENSE CHECK: A) D368267 
AND B) D371035 - JSC MIKRON 
 
¶1. Unauthorized disclosure of the information provided 
below is prohibited by Section 12C of the Export 
Administration Act. 
 
¶2. Reftel requested a Pre-license check to determine 
the legitimacy and reliability of the end-user, JSC 
Mikron, Zelenograd, Russia. The company is listed on 
BIS license application a) D368267 (Lam Research) and 
b) D371035 (Axcelis) as the ultimate consignee of an 
Alliance 9600 PTX Etch system (ECCN 3B001.c.1), an 
Alliance 9400 Etch system (ECCN 3B001.c.1), an Exelan 
HPT Etch System (ECCN 3B001.c.1), a High Energy 
Implanter Model HE (ECCN 3B001.b.1), and a High 
Current Implanter Model GSD Ultra (ECCN 3B001.b.2). 
These items are controlled for national security and 
anti-terrorism reasons under ECCN 3B001. The licensees 
are Axcelis, 108 Cherry Hill Drive, Beverly MA 01915- 
1088, and LAM Research, 4650 Cushing Parkway Fremont 
CA 94538. 
 
¶3. On June 7, 2007, Export Control Attache Donald 
Pearce and Licensing Officer Brian Baker of Office of 
Export Administration conducted a pre-license check at 
the offices of Joint Stock Company Mikron (Mikron), 
1st Zapadniy Proyezd #12, Zelenograd, Russia. The 
export control team met with Andrey Golusko, Deputy 
Head of Microelectronics Solutions, and Gennady 
Krasnikov, General Director, and Alain Astier, Vice 
President - Front-End Technology and Manufacturing 
Group of STMicrolectronics. 
 
¶4. Mikron is a producer of semiconductor products 
targeted for the Commonwealth of Independent States 
(CIS) and Southeast Asia markets.  Mikron, founded 15 
years ago, is a subsidiary of Joint Stock Company 
Sitronics. Sitronics owns 74% of Mikron stock, with 
17% of the shares held by small shareholders and 100 
legal entities, and the remaining 9% by the Federal 
Real Estate Cadastre Agency (Russian acronym 
Rosnedvizhimost). Sitronics, a telecom and IT 
solutions provider, is a publicly traded company 
listed on the London Stock Exchange.  Sitronics is 
majority owned by Joint Stock Company Sistema, a 
consumer services holding company.  Mikron employs 
approximately 1500 at its Zelenograd headquarters and 
a second facility in Voronezh.  About 600 of the staff 
are engineers, with the remainder in administrative 
and support positions. 
 
¶5. Mikron designs and produces over 400 different 
types of analog and digital integrated circuits (ICs), 
including smart cards and radio-frequency 
identification (RFID) products.  Mikron has two wafer 
fabs with a combined average annual capacity of 
600,000 4" wafers and 120,000 6" wafers.  Mikron also 
has a smart-card production facility capable of 
producing 280 million RFID cards and 60 million chip 
modules annually.  Mikron currently produces the RFID 
cards used in the Moscow Metropolitan Transport System 
(Metro subway trains) and GSM cards for cellular 
telephone providers MTS (Russia) and UMC (Ukraine). 
 
¶6. The Axcelis and Lam Research equipment will be 
utilized to give Mikron the ability to produce its own 
memory chips for use in its smart cards.  Mikron has 
partnered with ST Microelectronics of France (ST) for 
transfer of a "copy-exact" process and manufacturing 
technology for the production of Electrically Erasable 
Programmable Read-Only Memory (EEPROM) circuits.  ST 
will provide Mikron design expertise and access to its 
network of suppliers.  Mikron will then provide access 
to the Russian market for ST.  The package ST will 
provide consists of tool specifications, facilities 
and utilities specifications, process recipes and 
training for Mikron engineers.  ST and Mikron hope to 
have the clean rooms ready for tools by September, 
2007 and are targeting their first chip starts for 
December, 2007. This advance will allow the company to 
produce smart cards completely in-house, drastically 
reducing turnaround time and overall costs.  Mikron 
currently receives the EEPROMS from ST in France. 
 
¶7. Security at the facility is high due to the value 
of the end products; specifically banking smart cards, 
GSM chips and metro passes.  The system includes a 24- 
hour a day, seven day a week security presence, as the 
fabs are at work at all times.  An electronic system 
 
monitors all entry and exit areas, and special "man- 
trap" systems are employed in high-value areas such as 
the smart-card production facility.  Access to all 
areas is controlled by a proximity card system, which 
also logs employee movements within the facility and 
limits access to sensitive areas. 
 
¶8. Mikron is not currently a Ministry of Defense 
contractor, though it has supplied products to 
companies that may have military contracts.  The 
majority of items provided are power management ICs, 
such as the ones used in the automotive industry.  In 
Soviet times, Mikron produced voice scramblers for 
military communications systems, but as the company 
turned to civil applications after the fall of the 
Soviet Union, these product lines were converted to 
produce items of a commercial nature.  Today most 
military hardware in Russia is produced by the Federal 
State Unitary Enterprises, and most of the components 
are either fabricated in-house or imported. There are 
approximately 30 Russian enterprises with facilities 
in Russia and Belarus currently producing ICs, which 
may be involved in military contracting. 
 
¶9. Recommendations: Post recommends JSC Mikron, 
Zelenograd, Russia, as a reliable recipient of 
sensitive U.S. origin commodities. It is requested 
that post be notified of final disposition of the 
application, and of any shipments for this 
organization in order to conduct appropriate FCS 
follow-up and statistical reporting. 
(FCS MOSCOW/SBOZEK/DPEARCE) 
BURNS