On July 2, Kharon, a U.S. intelligence data firm, published an investigative report tracing how Russia has evaded international export controls to continuously acquire STM32 chips produced by European manufacturer STMicroelectronics for use in its drones. By analyzing IPO filings, trade records, and government actions, the report identified the sales channels of distributor Avnet and various tiers of manufacturers as potential pathways. The article also cited analysis by Lilly Lee, a non-resident fellow at DSET, pointing out that the nature of China’s dual-use drone industry helps evade international controls and sanctions.
Regarding Russia’s possible sanction-evasion channels, Kharon summarized two potential routes in the article. The first route involved Avnet’s Hong Kong subsidiary selling STMicroelectronics chips to Shenzhen Hobbywing Technology, a drone propulsion system company in Shenzhen. Hobbywing then integrated the chips into electronic speed controllers (ESCs) and sold them to Nanchang Sanrui Intelligence Technology, one of China’s largest drone propulsion suppliers. Finally, the goods were shipped to Russia via Sanrui’s subsidiary, Jiangxi Xintuo, which was designated by the U.S. in 2024 and 2025 for providing over $9 million worth of goods to companies inside Russia, placing it under sanctions and export controls. The second potential route identified by Kharon involved Hobbywing selling more than RMB 2 million worth of drone propulsion systems between 2023 and 2024 to Shenzhen Minhuaxin Technology, which was also just sanctioned by the EU last month for supplying components to a Russian drone producer.
Kharon stated in the report that the records do not establish that any individual STM32 microcontroller recovered from a Russian weapon followed one of these exact routes; however, they show how a commercially available European chip can move from a distributor into successive layers of Chinese manufacturers, some tied to Russia, before it resurfaces in weapons on Ukraine’s battlefields. The investigation specifically highlighted that China’s military-civil fusion strategy in the drone industry grants Russia the resilience to withstand sanctions. Both Hobbywing and Sanrui Intelligence Technology have been evaluated by the Chinese government as companies with strategic advantages, enjoying government financing and policy support, allowing them to serve both commercial and military interests simultaneously.
Citing the analysis of DSET non-resident fellow Lilly Lee, Kharon pointed out that China’s most valuable asset in the supply chain is not an arms manufacturer, but rather a civilian industry producing at massive scale, at minimal cost, that is inherently dual-use. The result is an industrial ecosystem designed to endure beyond any sanctions or war.
