Underscoring the growing scrutiny of global tech supply chains, an international network of companies cut ties with Taihui Electronics (Shenzhen) Co., Ltd. (Taihui Electronics), after the U.S. sanctioned it in January for shipping critical goods with potential military applications to Russia.
At the time of its designation, Taihui Electronics was ultimately owned by Palit Microsystems Ltd (Palit), a Taiwanese tech company that advertises a partnership with a Western one.
But trade data and other records suggest that Taihui Electronics may not have been an outlier in Palit’s corporate chain. Research by Kharon indicates that other Palit affiliates shipped dual-use electronics—products deemed critical for military purposes—to Russian recipients, including several now under U.S. sanctions for aiding Moscow’s war efforts and weapons arsenal used against Ukraine.
Inside the network: Palit Microsystems manufactures graphics processing units (GPUs) under its own and related brands. Starting in 2018, companies within its corporate network ramped up shipments of critical dual-use items to Russia, a practice that reportedly persisted well after Moscow’s invasion of Ukraine and the subsequent imposition of global sanctions.
Golden Top Development Limited, a Palit subsidiary and the former sole owner of Taihui Electronics, sent hundreds of electronics shipments to Russia between January 2018 and April 2024, trade data shows. Among them were dual-use items that the U.S., EU, U.K. and Japan classified in 2022 as having potential military applications.
Some of these shipments went to Russian entities that were later placed under sanctions for supporting the Kremlin’s defense industry.
At the time of its designation, Taihui Electronics was ultimately owned by Palit Microsystems Ltd (Palit), a Taiwanese tech company that advertises a partnership with a Western one.
But trade data and other records suggest that Taihui Electronics may not have been an outlier in Palit’s corporate chain. Research by Kharon indicates that other Palit affiliates shipped dual-use electronics—products deemed critical for military purposes—to Russian recipients, including several now under U.S. sanctions for aiding Moscow’s war efforts and weapons arsenal used against Ukraine.
Inside the network: Palit Microsystems manufactures graphics processing units (GPUs) under its own and related brands. Starting in 2018, companies within its corporate network ramped up shipments of critical dual-use items to Russia, a practice that reportedly persisted well after Moscow’s invasion of Ukraine and the subsequent imposition of global sanctions.
Golden Top Development Limited, a Palit subsidiary and the former sole owner of Taihui Electronics, sent hundreds of electronics shipments to Russia between January 2018 and April 2024, trade data shows. Among them were dual-use items that the U.S., EU, U.K. and Japan classified in 2022 as having potential military applications.
Some of these shipments went to Russian entities that were later placed under sanctions for supporting the Kremlin’s defense industry.
Kharon users can explore this Insight in greater detail through the ClearView platform.
Meanwhile, two Palit sister companies based in Hong Kong, Palit Microsystems Limited and Galaxy Microsystems Limited, supplied sensitive dual-use goods to some of the same Russian entities before and after the invasion of Ukraine. Several of those entities have since been sanctioned by the United States for operating in Russia’s technology and defense sectors.
Kharon users can explore this Insight in greater detail through the ClearView platform.
Why it matters: As regulators tighten sanctions and export controls around dual-use technologies, the Palit network spotlights potential vulnerabilities in global supply chains risk management. Its example highlights the need for tech firms to adopt a full-spectrum risk management approach—consistent with prior U.S., U.K. and EU guidance—by extending oversight beyond direct trade partners and government-listed entities, to include intelligence on direct subsidiaries and more distant corporate affiliates.
This broader scrutiny is essential for effectively identifying and mitigating exposure to sanctions and trade control measures.
Read more from Kharon:
This broader scrutiny is essential for effectively identifying and mitigating exposure to sanctions and trade control measures.
Read more from Kharon:
- US Adds 80 to BIS Entity List, Taking Sharp Aim at Chinese Tech Sectors
- An Export Ban on Joysticks? EU Adds a New Target To Hit Russia’s Military.
- US Imposes Export Controls to China’s Semiconductor Industry to Curb Military Advancements
- G7 Issues Export Control Guidance to Combat Russian Sanctions Evasion
