As the United States steps up its checks on China’s semiconductor industry, China has launched a countermeasure. The Financial Times (FT) reported on March 24 (local time) that the Chinese government is advancing its efforts to replace foreign technology with domestic alternatives. According to guidelines quietly released in December last year by China’s Ministry of Finance and Ministry of Industry and Information Technology (MIIT), the phase-out of Intel and AMD products is underway.
These guidelines apply not only to microprocessors but also to Microsoft Windows Operating Systems and database software developed abroad.
Amid the U.S. intensifying sanctions against Chinese companies and blocking the export of advanced semiconductor manufacturing equipment to China citing security threats, this purchasing guideline is deemed by FT as China’s most significant move to develop alternative technologies.
FT conveyed that it would become challenging for microprocessors from Intel and AMD to be included in the list of approved technologies by the Chinese government. To be included, the design, development, and production must all take place within China. Additionally, companies are required to submit all research and development (R&D) documents and code for their products.
With the Chinese government leading the push to eliminate foreign-made hardware, U.S.-based high-tech companies like Intel and AMD are expected to suffer a blow to their performance. Last year, China was Intel’s largest market, accounting for 27% of its total sales of US$54 billion, while AMD also reported that 15% of its US$23 billion revenue came from China. Although Microsoft has not disclosed its sales figures in China, President Brad Smith mentioned during a U.S. congressional hearing last year that 1.5% of its revenue comes from China.