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Weapons of Mass Destruction (WMD)

Russia may buy minority interest in defense chipmaker

RIA Novosti

31/08/2006 15:32 MOSCOW, August 31 (RIA Novosti) - A Russian economics official confirmed media reports Thursday that the government may buy a minority stake in the Mikron plant, which produces chips for the defense industry.

On Tuesday, the board of Mikron, a leading Russian exporter of chips, approved the additional private offering of shares to the Russian Federal Agency for the Management of Federal Property.

The company, which accounts for 28% of the microelectronic components used by the defense industry, will issue 1.088 million common shares in hopes of securing 287.528 million rubles (about $10.8 million).

"Given that Mikron is the only producer of such goods [in Russia], and that the defense industry accounts for a considerable part of the national economy nowadays, the decision is nothing out of the ordinary and can be justified by the need for government control over the monopoly production," said Kirill Androsov, deputy minister of economic development and trade.

He said the state would be able to control the production of semiconductors and supplies to defense enterprises by holding a minority interest. But he said the issue has yet to be thoroughly worked out.

Founded in 1964, Mikron performs the full cycle of chip manufacturing, including design, silicon facilities, packaging and distribution. It is the lead enterprise of the semiconductor division of Sitronics, one of the largest hi-tech companies in Eastern Europe.

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