Chip war: China asks its companies to abandon foreign models

2024-04-12 11:20:15

China is asking telecom companies to phase out foreign chips, dealing a blow to Intel and AMD.

The Ministry of Industry and Information Technology ordered, earlier this year, to the largest telecommunications operators from the country of gradually remove foreign chips of their networks by 2027reports the Wall Street Journal, citing people familiar with the matter.

A request which will necessarily repercussions on Chinese companiessince foreign chips – American, in particular – are currently essential to the country’s telecommunications networks.

But this decision will also an impact on suppliers Chinese operators, including the American giants Intel and AMDunderlines the American media. Their shares were down more than 1.5% during pre-marketing exchanges. let’s remember that China is a crucial market for Intel. In 2023, the country represented 27% of its total turnover.

New stage in Sino-American trade tensions

Beijing accelerates its campaign to eradicate American technologyin part to circumvent American sanctions more and more numerous. The government ordered state-supported institutions and companies to abandon iPhones, caused companies to abandon foreign computers et asked its electric vehicle makers to stick to locally designed silicon.

This vast and coordinated effort accelerated in 2023 with the rise of national champions such as Huaweiwhich raised the prospect of local alternatives throughout the technology supply chain. Telecommunications directive echoes moves by Western governments to ban use of Huawei network equipmentwhich they consider a threat to national security.

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