Created: 4/9/1963

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Current Support Brief



CENTRAL INTELLIGENCE AGENCY Office of Research and Reports


A major upward revision has been made in plans for the expansion of the Soviet electronics industry, which, if achieved, will result in an approximate doubling of output for this industry. The major increase will take placehen total output is estimated to exceedillion rubles (aboutpproximately 3rubles more than estimated as the original goal of the Seven Yearor that year. The key factor in attaining tho revised goal will be the ability of the USSR to provide planned increases in capital investment for the industry. (See

USSR: btiouri Ouipul of the Elemonio

oviet military/space programs could representfor electronics about as large as or larger than those currently forecast for US military/space programs The eslimated magnitude of the increase in Soviet expenditures for military/space electronics5 is such that it cannot be accounted for entirely by present forecasts of future Soviet military and 3pace programs. On the basis of present evidence, however, it is impossible to judge how much of the increment inwill go to meeting accumulating demands such as replacement and modernization of existing systems

Ruble values throughout this publication Are in prices5 adjusted to the1 rate of exchange. Conversion to US dollars was made on the basis of rales of exchange applicable to various components of the electronics industry.

and burgeoning maintenance requirements and how much may become available for new or expandedor weapons and support systems. On balance, the magnitude of the planned increase appears to be sufficient to satisfy in part both kinds of demand.

1. Electronics Production

The decision to expand drastically Soviet electronics production evidently was reached at tho2 meeting of the Central Committee of the Communist Party of the USSR. The first referenceevision of the Seven Year Plan for the electronics industry was2 article which indicated that capital investment was to be increased in several sectors of this industry. 1/ Aarticle in the3 Issue of Kommunist reported that the volume of output of the electronics and radioelectronics branches of Soviet industry would more than quadruplend that5 these branches would become "most substantial branches"ibulec moshchnymi otraslyami) in the national/ These statements were made by senior officials of the Soviet electronicsand planning authorities and apparently reflected decisions of the2 meeting of Uie Central Committee.

It ia estimated that the increase in production relative8 would resultotal output valued at aboutillion rubleslthough the USSR has never released information as to the value of output of the electronics industry, the new estimate5 has bean obtained by applying rates of change) estimate, which is believed to be accurate within relatively narrow limits.he original goals of the Seven Year Plan, drawn upalled for an approximate tripling in electronics production/ The apparent revision of5 goal means that an average annual rate of growth of betweenndercent for the45 will be required, which will yield an average rale of about

* By implication, "branch" as used above refersubdivision of industry such as machine tools ralhor thanajor economic sector such as light or heavy industry.

ercent for theear plan period (compared withnder the original plan). An annual rate of increase ofercent

is slightly less than the average rate of growth for theseeriod.

The doubling of output by the electronics industry53 (which will bc necessary if the revised plan goal is to be met) appears toifficult, but attainable, objective. Electronics output isto rapid expansion through the introduction of modern production machinery, and thero have been instances in the US, Franca, and Japan where comparable rates of increase in output have occurred. The initial base-year outputs of the Western countries were, however,uch lower level than those now planned for the Soviet electronics industry3 and, except for the US. primarily involved increases in consumer electronics. SJ

In spite of the fact lhat electronics outpui is susceptible to rapidery closely administered program will be required for the acquisition of new capital machinery, the construction ofplants, and the training of new production workers. Serious slippage of any one of these factors could cause underfulfillment of the revised plan. The additional investment required lo meet tho Incremental part of the new plan couldillion rubles. The amount originally planned for investment in the Soviet electronics industry during the Seven Year Plan period wasillion rubles, of which more than half should have been made by the end/ The remaining investment from the original plan, when combined wilh that needed for the revised goals, will result in extremely large investment during theears. In spite of this magnitude, the USSR probably is capable of supplying Uie required production machinory, although serious attempts probably will be made to augment domestic production by imports from non-Bloc countries, particularly Japan, France, and England.

The increased quantities of raw materials needed probably also will be forthcoming. The Soviet chemical industry is currently undergoing an expansion, and increased quantities of ceramics, synthetic films, germanium, and silicon as well as other specialized electronics

materials arc becoming available. As many of these items are not covered by Western embargo, non-Bloc sources also can be utilized to supplement domestic production.

2. Military Consumption

The consumption of electronic equipment by Soviet military and space programs is estimated to have averaged aboutercent of total output of electronics for the past decade. In value terms the electronics share of military machinery is estimated to have increased from aboutoercent8 to aboutercent With new military systems coming in that are even more electronics-intensive, those proportions will increase still further. ilitary and space programs could be absorbing about three-fourths of the outpui of the electronics industry. arge portion of the output of the electronics industry5 will be available for military/ space purposes is supported by the absence in the above sources of any reference to planned increases in the rate of production of consumer goods under the revised plan. Continued increases arc expected,in industrial consumption of electronics.

The military share of the revised plan5 is now estimated to amount to aboutillion rubles*bout as Urge as or larger than the presently anticipated total US military/space procurement of electronic equipmentillion* 2 Soviet outlays for military/space electronics were roughly two-thirds as large as those of the US. It is to be noted, however, that such comparisons can be no more than gross approximations, owing to tho nature of international comparisonsarticularly wilh respect to military hardware. (Sec

Although the full implications for the Soviet military/space pro-gramaMi electronics output on the order ofillion rubles5 are as yet unclear, it seems virtually certain that there will be

* Estimated from ORR ruble/dollar ratios to rangeillionillion-

** As estimated by the US Electronics Industry Association.


USSR: Estimated Allocation of Output of Soviet5

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real and substantial increasesagnitude that cannol be accounted for entirely by present estimates of future Soviet military and space programs. It is clear that there will be many claimants for theelectronics outputncluding new or expanded programs for weapons and support systems, replacement and modernization of

existingnd burgeoning maintenance requirements. It ishowever, to judge whether the revised plan reflects8 of the over-all demands for electronics required5 or whether the new plan indicates that thereifaave been recent decisions to increase one or several programs that have largerequirements. On balance, it seems likely that the planned increases stem from both causes.

Numerous references to existing needs for more modern and varied electronic equipment In aLl branches of the armed forces are contained in Soviet military literature published ineriod. These needs are grouped generally into three categories: integrated communications equipment (including electronic computers, video-communications equipment, recording devices, electronicduplicators, and photo-telegraphiceconnaissance equipment (including optical, infrared, sound-ranging, and seismo-intelligenceide range of electronic equipment to improve the operational efficiency of guided-missile units. Continued references to the scarcity of electronics equipment in this literature is indicative of the limited output of the industry in the past relative to the over-all demand. Moreover, the literature indicates mounting pressure to take corrective steps.

izable pari of the increased output of electronics could go to meeting these unfulfilled demands, the proposed increment seems large enough to accommodate increased emphasis on one or more of lhe important programs that will require substantial inputs of electronic equipment5 and later years. These programs could include the deployment of an operational antiballistic missile systemroader scale than heretofore planned; the acquisition of more sophisticated, faster-reacting strategic weapon systems (including the rcoquipping of presently deployedr the acceleration of space programs. ignificant part of this increment almost certainly will bc devoted to Soviet military or space programs, it is impossible on the basis of present evidence to specify withhow this increment is likely to bc apportioned among individual programs.

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