Ukrainian OSINT analytical group Frontelligence Insight, in a special investigation published on 19 May 2025 and based on tens of thousands of internal files leaked by Russia’s 256 Cyber Assault Division, reveals systemic issues crippling Russia’s military optics modernization efforts, including the development of UAV-integrated fire control systems, anti-drone laser platforms, and thermal targeting optics. 

Frontelligence Insight’s report covers the operations of Shvabe Holding, a key subsidiary of the state-run Rostec conglomerate, and highlights production failures, reliance on covert foreign supplies, especially from China, and ongoing challenges with import substitution.

While Russia has seen high-profile advancements such as widespread drone deployment on the battlefield in Ukraine, the report notes that less-visible but crucial technologies—like thermal imaging, fire-control systems, and electro-optical devices—are central to ongoing warfighting developments, according to the study.

These technologies fall under the ISTAR category (intelligence, surveillance, target acquisition, and reconnaissance), which have become synonymous with modern warfare but require precision manufacturing and scalable production capacities, both of which Shvabe struggles to achieve.

Shvabe’s stalled projects and faulty systems

Shvabe Holding is responsible for a vast portfolio of military optical systems, including scopes, night vision devices, thermal imaging modules, fire-control systems for tanks and aircraft, UAV sensors, and space-based surveillance gear. Although it also produces civilian items such as medical equipment, the Rostec subsidiary’s primary focus remains on military use.

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Based on leaked investment documents dated 2024, Frontelligence Insight outlines active projects at several Shvabe subsidiaries:

• KMZ (Krasnogorsky Zavod): Developed airborne laser detection equipment for helicopters, advanced seeker heads for tank protection, OPS-28M targeting systems for Mi-28NM attack helicopters, and pursued modernization of circuit board and thermal imaging production. 

• Lytkarino Optical Glass Factory: Worked on TVN-5M and TVN-5ML night vision devices for tanks like T-62 through T-80, and BMP-1 to BMP-3 infantry fighting vehicles, along with a TTM-5 thermal vision module.

• Orion Scientific Production Association: Designed laser target designators, a collimator sight, and the SWIR 640 camera.

• Polyus Research Institute: Initiated production of bismuth-based optical fibers and amplifiers for high-speed fiber-optic systems.

• State Institute of Applied Optics: Tasked with replacing the ‘Catherine-XP-PCS’ thermal camera in T-90M tanks with a domestic version named ‘Osnova’.

• Shvabe – Technological Laboratory: Began development of high-resolution video camera modules for electro-optical systems.

Despite this activity, internal emails indicate widespread operational inefficiencies. A leaked protocol from an Operational Headquarters meeting in August 2024 identified unsatisfactory quality of the supplied OPS-28M products as a serious problem—these optical systems are mounted on Mi-28NM helicopters.

Further, Shvabe’s internal documents show that in February 2024, its affiliate Polyus was ordered to develop new laser technologies to counter UAV threats, as part of a program running through 2033. Earlier, in 2022, Polyus and High-Precision Systems had already been tasked with developing a laser-based anti-drone system potentially integrable with the Pantsir-S1 platform.

In May 2024,, Joint Stock Company VOMZ, in collaboration with enterprises of JSC Shvabe was instructed to evaluate the integration of UAVs into tank fire-control systems. The aim was to enable indirect fire at ranges up to 15 km from concealed positions. This artillery-style firing technique, first used by Ukraine since 2014, is now reportedly adopted by Russia, particularly as drones enable real-time fire correction.

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The investigation notes that Shvabe is also working on upgrading II+ night vision scopes for RPGs and integrating thermal imaging into existing platforms like the Agat-MP fire-control system used on BMPT vehicles.

China, import substitution, and illicit procurement schemes

As Western sanctions increasingly cut off access to military-grade components, Shvabe, like many other Russian companies, has sought both domestic alternatives and foreign circumvention routes.

In April 2025, InformNapalm reported that IRCOL Collimators made by French company HGH Infrared Systems were delivered to Indian company PCC Pvt. Ltd., which allegedly misled the supplier and routed the equipment through Russian intermediary LLC EMT to Zenit-Investprom, a Shvabe-linked firm.

As revealed by data from the 256th Cyber Assault Unit, Russian company YUMAK imported CNC machines from Push Ningjiang Machine Tool Co. and Tianjin No.1 Machine Tool Works, delivering them to Zenit-Investprom for use by KMZ, a producer of electro-optical systems.

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A Shvabe document listed Shvabe Opto-Electronics, based in Shenzhen, China, as a supplier. According to Trademo, this firm has consistently shipped parts to the Ural Optical and Mechanical Plant and JSC Novosibirsk Instrument-Making Plant, both under sanctions. The Shenzhen entity, also called UOMZ Meizhou, has operated uninterrupted since 2009.

“As in our previous investigations into other Rostec-affiliated firms, we have repeatedly found Chinese industrial equipment playing a key role in supporting Russia’s import substitution efforts and modernizing its military production capabilities. Much of this progress would be difficult to imagine without access to China’s industrial capacity and technological resources.,” Frontelligence Insight states.

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Delayed production expansion

Zenit-Investprom signed a deal to modernize Zavod No. 9—maker of T-90 tank guns and D-30 howitzers—by updating project documentation at a cost of 29.418 million rubles (over $365,000). The contract deadline was 31 December 2023.

The upgrade spans three phases and includes 67 pieces of machinery, such as 32 machining tools and a laser heat-strengthening system. This equipment is critical for increasing barrel production capacity, which is strained by high wartime usage.

Yet, in April 2024, Zavod No. 9 issued a letter to Zenit-Investprom demanding action after receiving no proof of completed work. A follow-up document from 8 November 2024 stated that earlier complaints had not been addressed, indicating persistent delays.

Broader pattern of delays and substitution

According to Frontelligence Insight, Shvabe’s recurring delays, missed deadlines, and dependence on Chinese imports represent a systemic issue. Still, some progress has been made integrating wartime lessons into scalable production:

“Perhaps the most significant shift since the pre-war period is Russia’s effort to integrate battlefield experience not just into limited, showcase upgrades, but into broader mass production— leveraging machinery and components sourced from both Western and Chinese suppliers,” the report reads.

Presenting the report on X, Tatarigami of Frontelligence Insight noted that “Russia’s future military will be more modern and technologically advanced than during the 2022 invasion.”