China Plans to Ban AMD and Intel Chips from Government Devices

• China is planning to ban the use of foreign-made chips by companies like AMD and Intel from government devices
• The ban is also likely to impact other tech equipment like operating systems and software databases
• It seems to be a response to numerous sanctions placed by the US on China

China has rolled out a new directive that will slowly phase out US-made processors like Intel and AMD from government devices and servers, according to a report released by The Financial Times on Sunday. This includes all government agencies in the country above the township level.

Referred to as the new PC, laptop, and server guidelines, the idea was first proposed on December 26 2023 by the Finance Ministry and the Ministry of Industry and Information Technology (MIIT).

The ban will also impact foreign-made operating systems like Windows by Microsoft and other software databases.

Speaking about the guidelines, a local government official managing IT system substitution said it is the first nationwide, detailed and clear instructions for the promotion of Xin Chuang (innovation)".

The authorities want the government agencies to purchase safe and reliable" processors.

A list of 18 safe processors has already been released which includes many popular Chinese manufacturers such as Huawei and Phytium.

For other companies, they'll have to submit their product's complete R&D documentation. The regulators will decide whether it's fit for China based on its design, development, and production. Given the issues between the two nations right now, US companies are not likely to make the cut.

Both Microsoft and Intel have declined to comment while AMD is yet to respond to the comment request.

Read more: Baidu turns to Huawei for AI chips as an alternative to Nvidia

Why Is China Shifting To Domestic Software Products?

One of the reasons cited behind this sudden switch to domestic alternatives is that China is trying to reduce dependency on other countries, especially the US.

Previously, China relied heavily on the US for most of its technical resources. However, the US took a series of steps that limited their access and forced them to boost their own tech industry.

• The US was the first one to reduce dependency on China by boosting its domestic semiconductor output with the Biden administration's 2022 CHIPS and Science Act. This was a significant move because semiconductors were the core cause of conflict between the US and China.

• Another major blow to China's tech sector was the restriction of the export of semiconductors to Beijing in 2022. The US was worried that China might be using the technology for military purposes.

• A similar regulation was rolled out in 2023 that prevented Nvidia (one of the biggest global chip makers at the moment) from selling advanced AI chips to China.

• In addition to that, earlier this week, a new report surfaced that suggests that the US might be planning to ban some Chinese semiconductor firms associated with Huawei. This includes both companies built by Huawei as well as those acquired by it.

• Several sanctions have also been imposed on Chinese firms, including a possible sanction on one of the biggest memory chip makers in China - ChangXin. Companies like SwaySure, Shenzhen, Qingdao Si'En, and Pensun Technology Co are also on the verge of being blacklisted.

• In 2019, heavy sanctions were imposed on Huawei and SMIC (another major Chinese chipmaker) that restricted their access to the newest tech. As a result of this, SMIC failed to acquire the extreme ultraviolet lithography machines that would help them in advanced chip making.

As per reports, US sanctions directly boosted China's chip-making industry. Its top 10 equipment manufacturers reported a 39% boost in revenue in the first half of 2023 compared to the previous year.

Now that China has decided to punch back, it will be interesting to see how this move impacts the businesses of Intel, AMD, and others. This might also be just a start of completely phasing out US chips from the Chinese markets. Experts believe that this ban can be extended to the entire Chinese market in the coming years.

Read more: China cites national security fears & ousts micron chips

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