The Peter Zeihan Podcast Series - Russia Gets Knocked Off Its Horse || Peter Zeihan

Episode Date: July 1, 2026

Ukraine has struck a key semiconductor facility in Voronezh that could significantly weaken the Russians' ability to produce advanced military equipment.Join the Patreon here: https://www.patreon.com/PeterZeihanFull Newsletter: https://bit.ly/4v1arVE

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and outdoor experiences just steps from your room. Come to Fredericton, stay at Delta Fredericton, and visit Marriott.com to secure your room. Everybody, Peter Zine here coming to you from Colorado. It is the 22nd of June, and today we're going to talk the military industrial complex of Russia, specifically as regards information technology, specifically as regards semiconductors. The reason we're talking about that today is that the Ukrainians sent a large bevy of cruise missiles into a military facility in Varezhna, which is a city in south-central Russia, just north of the Caucasus. Varensna is an industrial plant that dates back to 1959 that is primarily servicing military needs. So they make semiconductors there. They are cut from the wafers.

They're tested, their package, and then they're prepared for incorporation into various military technologies like fighter jets and tanks and especially missiles. Anyway, we don't have good damage reports from it because it's the Russians and they're not going to tell us. But the whole thing appears to be on fire. And that's usually really bad for semiconductors, which every stage of the process requires clean room conditions. Aside from Vresna, the Russians only have one. one other place that makes semiconductors at all. It's called Zelenograd. It's just to the northwest of Moscow. It's three facilities that are quite a bit smaller and therefore easier to target. Verena has extensive anti-air defense because of the Ukrainian drones. Zelenegrad, not so much.

And I would bet your ass that the Ukrainians are going to be targeting Selenegrad very, very soon. Now let's talk about what's at stake here for the Russians. The type of chip. that are used in military equipment writ large are actually pretty basic because, for example, for missiles, you only do one thing once. You might need chips for guidance systems. You might need chips for things like IR goggles, whatever, but those are not cutting edge nodes of 7 nanometers or below, or even cutting edge direct all of violet nodes of like 28 nanometers to 7 nanometers. These are really dumb chips. And the Russian military complex reflects that. So with a few specific exceptions that they can make at very, very, very, very low run rates. The most advanced

semiconductors that both of these facilities, the Leningrad and Varenzna can make, is about 90 nanometers and then scaling back to 150. And even that uses extensive imported foreign equipment. The only chips that the Russians can make without any help, it's about 350 nanometer, which I could probably bash together in my kitchen if I was willing to watch a lot of YouTube tutorials, which I am not. Anyway, um, where does this leave the Russian? Russians. Well, with Verzna offline for an indetermined period, probably permanently, because the Ukrainians will hit it again, and with Zeltengrad, not long for this world, the Russians now have to find another way to make their gear, and they were already having a significant problem. They were only

manufacturing new gear writ large at 1 5th to 1.20th, the weight that they were burning through it in the war. Part of that is the Russian industrial complex. Part of that is just the nature of this conflict where the Russians just throw scads and scads and scads of things against everyone to see what it sticks. But the biggest part of the strategy that the Russians depend upon is using fighter jets to drop glide bombs from, say, 20 miles from the front line, so they never even get in risk range, and then using long-range weapons in order to target things like the Ukrainian power grid. All of that requires these chips. And yes, you can pull a chip out of something like a massager unit or a smart margarita machine or a washing machine and plug it into your military

gear but military hardware is hardened it needs to be able to handle things like vibration and heat and maneuvers and washing machines are not designed to the same specs which means you're going to have much much much slower performance and much much higher failure rates and when you're talking about like a hypersonic missile you might as well not even try the chinese can export to the Russians chips of the appropriate technological level. But just as within washing machine chip, the chip wasn't designed for the hardware. The hardware wasn't designed for the chip, so the failure rates are going to go through the roof. Which means that probably in just a few days, the only hardware that the Russians are going to have that is advanced, the stuff that's in

the warehouses is currently being assembled or is on its way to the front already. They will not be able to replace them with additional hardware at the same rate or with the same quality levels. and the Russians were never really known for high quality levels. So for conventional weaponry, helicopters, jets, tanks, missiles, the Russians now are probably facing down a qualitative collapse in what they can do. At the same time, they're looking at a quantitative limit at what they can produce, even with extensive Chinese help. Ukrainians, on the other hand, when it comes to drones,

are already the numerical and technological leaders in this conflict, producing more drones and better drones than the Russians have for several. weeks now. That's still spinning up, especially with the infusions that have come in from the Europeans, now that the Trump administration has drop-kick them and they're desperate to develop new technologies, and from the Arabs of the Persian Gulf, who are furious with the Trump administration for the Iran War. All of them are basically underwriting the Ukrainian defense industrial base now. And the only people who are underwriting the Russians are the Chinese and they insist on getting paid. Anyway, you fast forward just a few weeks, and this is going to start to impact the front line, because without this higher

and equipment, all of a sudden the Ukrainians are punching at the same weight that the Russians are. That doesn't mean the war is over by any stretch of the imagination. God know. Russia is still the largest country on earth. They still have a significant holdover equipment list from their Soviet times. They still outnumber the Ukrainians four to one. In any battle that matters, they outnumbering the Ukrainians three to one. They still have a lot going for them. But if they can't replenish their weapons, if they can't replenish their tech, then it all becomes whether or not the Chinese make a political or not. So what we're probably going to see over this summer is a significant change in how this war is fought. We've gotten a glimpse of that in the last couple of months with the new Ukrainian

drones targeting things like logistics. But now the Russians are going to either have to, A, figure out a way to counter that without microchips. Unlikely. They're going to have to be dust-off weapon systems that to this point they've been unwilling to use, like say nukes, which have, let's just say, complications. Or three, the Chinese are going to have to put their shoulder into the conflict in a way they just haven't yet. Either way, this long, slow grind of the last three years is over, and this is about to become a lot more dynamic very, very soon. Looking for an East Coast escape? Discover Fredericton, home to scenic riverfront trails, vibrant culture, and unforgettable sunsets. Stay at Delta Fredericton, Atlanta's urban resort.

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