Beijing, 27th March 2024: China recently introduced new procurement guidelines aimed at reducing its reliance on foreign technology, specifically U.S. processors, in government computers and servers. This move effectively blocks chips from leading companies like Intel and AMD, as reported by the Financial Times.
The guidelines, which were unveiled on Dec. 26 and are now in effect, also impact Microsoft’s Windows operating system and foreign-made database software in favor of Chinese alternatives. Government agencies at the township level have been instructed to purchase “safe and reliable” processors and operating systems, according to the FT report. Both AMD and Intel have refrained from commenting on the matter.
This development is part of China’s broader efforts to bolster its domestic semiconductor industry and decrease dependency on overseas technology. Semiconductors, crucial components in various devices ranging from smartphones to medical equipment, have become a focal point in the ongoing tech rivalry between the U.S. and China.
The U.S. has implemented export restrictions to limit Beijing’s access to key semiconductor equipment and technologies. In response, Washington introduced rules in October 2022 to restrict China’s ability to acquire or produce advanced semiconductor chips, citing national security concerns. Furthermore, the U.S. unveiled additional regulations in October 2023 to prevent Nvidia, a chip design firm, from selling advanced AI chips to China.
Since 2019, Chinese tech giants like Huawei and the country’s leading chipmaker SMIC have faced sanctions from the U.S., curbing their access to cutting-edge technologies. SMIC, in particular, has struggled to acquire essential extreme ultraviolet lithography machines crucial for advanced chip manufacturing from ASML, a leading firm in the semiconductor industry. The U.S.-led tech embargo has had a silver lining for China’s domestic chip equipment manufacturers, with the top 10 firms reporting a 39% increase in revenue in the first half of 2023 compared to the previous year, according to data from Shanghai-based CINNO Research.