China has recently issued orders for its major telecommunications operators to remove foreign chips from their networks by the year 2027. This directive is seen as a setback for leading US chip manufacturers such as Intel and AMD.
Reports from The Wall Street Journal reveal that Chinese officials instructed state-owned operators, including China Mobile, China Unicom, and China Telecom, to gradually phase out foreign processors from their infrastructure. This move is perceived to escalate tensions between China and the United States.
The Ministry of Industry and Information Technology in China mandated these operators to conduct assessments of their networks for any foreign semiconductors. Subsequently, they are required to develop timelines for replacing these chips with domestic alternatives.
In 2023, China was responsible for more than a quarter of Intel’s revenue and 15% of AMD’s earnings. This decision to eradicate foreign chips from the networks is a significant blow to both companies.
Furthermore, The Financial Times reported earlier this year that China aims to eliminate the use of Intel and AMD processors, along with Microsoft’s operating system, from government computers and servers. Instead, there is a strong push for utilizing local hardware and software solutions.
To add to the complexity of the situation, the US recently enforced stricter export restrictions on the sale of AI chips to China, targeting companies like Nvidia. These moves from both countries underscore the intensifying competition and technological rivalry in the semiconductor industry.
