China has reportedly directed its major telecom carriers to eliminate foreign network chips from their infrastructure by 2027, potentially impacting US chipmakers Intel and AMD, which supply the majority of processors for networking equipment.
Sources familiar with the matter informed The Wall Street Journal that China’s Ministry of Industry and Information Technology issued the directive, instructing telecom providers to develop a timeline for the removal of foreign-made chips.
The move is seen as part of China’s broader efforts to transition towards domestically produced chips, possibly driven by perceived enhancements in quality and reliability.
This decision comes amidst escalating tensions between China and the US, with Beijing accelerating its push to replace Western technology with homegrown alternatives. In response, the Biden Administration has imposed stricter controls on the export of high-tech goods, including advanced chips, to China.
The US government has previously taken actions to restrict Huawei’s cellular equipment over security concerns and has barred chipmakers like Nvidia from exporting their AI chips to China. Nvidia has reportedly had to modify its chips multiple times to comply with US regulations.
Additionally, reports suggest that AMD faced challenges obtaining US approval for an AI chip designed for China and may need to seek an export license.
In March, it was reported that Beijing had implemented guidelines to phase out US chips from government computers and servers, impacting companies like Intel and AMD.