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Big blow to Intel and AMD: China abandons Western chips to switch to its own

Natasha Kumar By Natasha Kumar Apr15,2024

Big blow to Intel and AMD: China abandons Western chips to switch to its own

As a result of Beijing's new policy, Intel sales may fall by 27%, and AMD — by 15%. Many Chinese companies have already replaced American chips with domestic ones.

Chinese authorities have asked telecom operators to stop using foreign chips. Beijing presents such plans to telecom companies until 2027. And the most important thing is that such a decision will negatively affect the sales of Intel and AMD, two key American processor manufacturers, reports Interesting Engineering

China strives to reduce dependence on Western production technologies. The authorities called on telecommunications companies to switch to domestic alternatives. These measures are an appropriate response to the strengthening of US sanctions against the Chinese technology sector. In particular, China's Ministry of Industry and Information Technology has ordered state-owned mobile operators, such as China Mobile and China Telecom, to check their networks for non-Chinese semiconductors and schedule replacements. And in March, the Chinese government published recommendations to end the use of Intel and AMD processors on state-owned personal computers and servers.

China was the largest market for US chipmaker Intel in 2023. The company received more than 27% of its total revenue from this Asian country. AMD also earns quite a lot in this region, because last year China and Hong Kong accounted for 15% of the company's sales. The US government has also not approved an AMD AI chip designed for China. The company will now have to apply for an export license. Obviously, manufacturers are heavily dependent on the world's second largest economy for their sales.

The publication WSJ  found that recent purchases of Chinese telecommunications operators clearly indicate that they are increasingly switching to domestic processors. This is partly due to the improved quality and stability of Chinese chips. In 2022, China's state asset regulator also instructed state-owned enterprises to replace office software systems with domestic products by 2027.

The US plans to limit advanced chip production in China. The White House is negotiating with Seoul to impose controls on the export of semiconductor tools to China. It is noteworthy that South Korea is one of China's key trade partners. The US authorities require Seoul to strictly limit the export of equipment and technology necessary for the development of memory chips and advanced logic chips.

The media reminds that in October 2022 the US introduced rules limiting China's access to advanced American chips for artificial intelligence applications. At the end of last year, the US announced new restrictions aimed at preventing the sale of more AI chips to China, seeking to close loopholes used by both customers and manufacturers. of Huawei. The American company used a special permit granted to it by the administration of President Donald Trump. After all, Huawei recently introduced its first laptop with artificial intelligence support — MateBook X Pro equipped with Intel's new Core Ultra 9 processor.

Some US lawmakers have asked President Joe Biden's administration to revoke Intel's special license, even though it expires this year.

Natasha Kumar

By Natasha Kumar

Natasha Kumar has been a reporter on the news desk since 2018. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Times Hub, Natasha Kumar worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my 1-800-268-7116

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