Mar 7, 2022 - Technology

Inside tech companies' unprecedented move to suspend sales in Russia

A view of the Samsung Electronics plant in the Vorsino industrial park.

A view of the Samsung Electronics plant in the Vorsino industrial park. Photo: Gavriil Grigorov/TASS via Getty Images

As sanctions clamp down on Russia, some of the biggest names in tech have halted new product sales in the country entirely, including Apple, Samsung, Microsoft and Adobe.

Why it matters: The move is clearly significant, but experts say it won't mean a massive financial hit for the companies. Plus it ensures compliance with sanctions and avoids the challenges of getting paid within a fractured financial system.

Driving the news:

  • A growing number of tech firms have said they are suspending shipments to Russia, including companies that the country relies on for both tech components and products including smartphones, PCs and servers.
  • Samsung, which is among the leading smartphone brands in Russia, said it has stopped Russian shipments of both devices as well as components, such as computer chips. Apple and Dell are halting sales, as has chipmaker Intel and software giant Microsoft.
  • A number of financial services companies, from credit card issuers Visa and MasterCard to fintech players like PayPal, have also suspended business in Russia.

Between the lines: The financial impact for the tech companies is modest, while the impact on Russia is likely to be significant as the country relies heavily on U.S.-made tech products.

  • Economic sanctions drove some of the decisions, although in some cases, companies went further than they were required by law.

What they're saying:

  • TECHnalysis Research analyst Bob O'Donnell: "While I doubt the halt of Russian sales will be permanent, I could see it lasting beyond the end of the war, which would be very detrimental to Russian businesses and the overall economy."
  • Wedbush analyst Michael Pachter: "I think everyone jumped on the bandwagon because of the fight between democracy and autocracy, and the fact that this was unprovoked. Other conflicts arguably had some 'rational' explanation."

Yes, but: Having shown a willingness to halt business in Russia, tech companies are likely to face pressure in future conflicts.

  • However, several industry insiders and analysts said the unique nature of Russia's invasion, as well as the presence of international sanctions, will give companies plenty of room to sidestep demands for a repeat performance in future conflicts.

Go deeper: The global companies that are abandoning Russia, and why

Go deeper