China’s Ministry of Industry and Information Technology is telling the country’s telecommunications providers to get rid of foreign-owned chips in their networks and infrastructure by 2027.The order issued earlier this year means China’s telecom firms must determine how many chips must be replaced and develop clear timelines for that process. US firms Intel and Advanced Micro Devices (AMD) will be most impacted by this decision, according to a Friday report from The Wall Street Journal citing people familiar with the plans. Intel still made up 76% of the market share for server CPUs globally in 2023, the outlet reports, citing TrendForce data, but both companies have historically been among the biggest processor providers to China and the rest of the world. China’s largest telecom firms like China Mobile, China Telecom, and China Unicom are state-run. Each of these firms could have thousands of foreign chips in their systems at cloud computing data centers, according to the report. These servers are also used in key telecoms operations in the country. But this decision isn’t surprising considering the ongoing rivalry between the US and China over semiconductor manufacturing. Just last month, The Financial Times reported that China is also phasing out foreign chips on older government computers and replacing them with Chinese ones instead. Firms like Huawei, Semiconductor Manufacturing International Corporation (SMIC), or HiSilicon stand to gain from China’s broader push toward domestic-owned processors.
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US President Joe Biden has repeatedly emphasized for years that he wants the US to become a leading chip manufacturer and has poured billions into this mission. The US also doesn’t want China to get ahold of America’s most advanced tech, and has restricted chip exports to China. When it comes to expanding the US chip industry, Biden’s 2022 CHIPS & Science Act has allowed the Department of Commerce to grant Apple and Nvidia chip-maker TSMC $11.6 billion and Intel $19.5 billion in loans and grants to build out and increase production in the US. The White House is expected to announce similar funding for Samsung next week in a move that would reportedly bring Samsung’s total US investment to $44 billion.
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