The Financial Times reported that China has introduced new guidelines aimed at phasing out U.S. processors in government computers and servers, effectively excluding chips from Intel and AMD. These procurement guidelines, revealed on December 26 and currently being enforced, will also impact Microsoft's Windows operating system and foreign-made database software in favor of Chinese alternatives. The government has directed agencies at the township level and higher to procure "safe and reliable" processors and operating systems.
Both AMD and Intel declined to comment on the report. This move from China comes amid efforts to strengthen its domestic semiconductor industry to reduce reliance on foreign technology. Semiconductors, vital components in a wide array of devices, have become central in the technological rivalry between the U.S. and China. The U.S. has imposed export restrictions to prevent Beijing from accessing crucial semiconductor equipment and technologies.
In response to concerns that China could leverage advanced semiconductor chips for military purposes, the U.S. implemented export controls, including rules introduced in October 2022 and 2023 to curb China's access to advanced semiconductor technology. These measures have also targeted Chinese tech companies such as Huawei and SMIC, imposing sanctions to restrict their access to advanced technology. SMIC has faced challenges in obtaining extreme ultraviolet lithography machines critical for advanced chip production from ASML.
The impacts of the U.S.-led tech embargo have been notable, leading to increased revenues for China's domestic chip equipment manufacturing firms. China's top 10 equipment makers reported a 39% rise in revenue during the first half of 2023 compared to the previous year, according to data from Shanghai-based CINNO Research.
