A major chipmaker is in big trouble. Stats reach nearly $3 billion.

• Microprocessor manufacturer Angstrem has been named the most unprofitable company in Russia in 2024.
• The tech giant's loss amounted to 236.3 billion rubles ($2.86 billion), Forbes reported.
• Angstrem's financial problems date back to 2008, when the factory, then controlled by companies linked to former Minister of Communications and presidential advisor Leonid Reiman, borrowed €815 million from VEB to launch production of processors, smart cards and electronic passports.
• However, production never started at full speed.

Russian state-owned chipmaker Angstrem has been ranked as the country's most unprofitable company in 2024, with a net loss of 236.3 billion rubles ( $2.86 billion ), Forbes said in its latest ranking published last Tuesday.

Most of the losses resulted from the recognition of liabilities to the parent company, the state development bank VEB , amounting to 238.2 billion rubles ($2.88 billion).

With revenues of just 5 billion rubles ($60.5 million), Angstrem posted a net loss that was almost 47 times its turnover .

The problems of the Russian giant began in 2008.

The chip maker's losses exceeded those of Trust Bank (130.7 billion rubles, or $1.58 billion), the Rosseti electricity grid operator (116.9 billion rubles, or $1.41 billion) and the Moscow Metro (107.7 billion rubles, or $1.30 billion).

State-owned enterprises in the top ten were responsible for 652.8 billion rubles ($7.91 billion) of losses, or 70 percent of the total.

Angstrem's financial problems date back to 2008, when the factory, then controlled by companies linked to former Minister of Communications and presidential advisor Leonid Reiman, borrowed €815 million from VEB to launch production of processors, smart cards and electronic passports.

The project, described as strategic, aimed to become the largest integrated circuit manufacturer in Russia. It was supported by both the government and the Security Council. However, the plant never began full-scale operations.

In 2014, the tax authorities found that Angstrem had effectively lost the ability to conduct business.

Filing for bankruptcy and sale of the factory

In January 2019, VEB seized the factory's equipment and shares and filed for bankruptcy. The total amount of claims against the company amounted to €1.3 billion .

Last week, a court lifted the company's guarantee obligations regarding this debt and transferred its assets to VEB for the symbolic amount of one ruble ($0.01).

Reiman has since distanced himself from the failed venture and has not faced any consequences.

His new company, Rutek, received state support this summer to build a new plant in the Sistema special economic zone in Saransk, in the Republic of Mordovia.

The multi-billion dollar project includes initiatives aimed at replacing imports in the production of smartphones, computers, tablets, laptops and telephone exchanges.

Rutek's previous attempts at import substitution have raised questions. Its R-Phone, advertised as a domestic smartphone for government officials, turned out to be a rebranded Symphony Helio 80 from Bangladesh, selling for three times the price.