China has announced guidelines that prohibit the use of US processors from AMD and Intel in government computers and servers. Additionally, Microsoft Windows and foreign database products are no longer allowed, in favor of domestic solutions. This decision is the latest development in a lengthy tech trade war between China and the US.
Government agencies are now required to use “safe and reliable” domestic alternatives to AMD and Intel chips. The approved list includes 18 processors, such as those from Huawei and the state-backed company Phytium, both of which are banned in the US.
These new regulations, introduced in December and recently enforced, could have a significant impact on Intel and AMD. China made up 27 percent of Intel’s $54 billion in sales last year and 15 percent of AMD’s $23 billion revenue. However, it is unclear how many chips are utilized in government versus the private sector.
This move represents China’s most aggressive effort yet to limit the use of US-built technology. In the past, Beijing prohibited domestic companies from utilizing Micron chips in critical infrastructure. Similarly, the US has imposed bans on various Chinese companies, from chip manufacturers to aerospace firms. The Biden administration has also restricted US firms like NVIDIA from selling AI and other chips to China.
Countries like the US, Japan, and the Netherlands have traditionally dominated cutting-edge processor manufacturing. Recently, they agreed to tighten export controls on lithography machines from ASL, Nikon, and Tokyo Electron. Despite this, Chinese companies like Baidu, Huawei, Xiaomi, and Oppo have begun designing their own semiconductors in anticipation of a future where they may no longer import chips from the US or other countries.
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