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RFI Chinese: China Asks Telecom Operators to Phase Out Foreign Chips

Radio France Internationale (RFI) Chinese Edition recently reported that, people familiar with the matter said Chinese officials earlier this year directed the country’s largest telecom operators to phase out foreign processors at the heart of their telecom networks by 2027. This would be a hit to U.S. chip giants Intel and Advanced Micro Devices (AMD). China’s Ministry of Industry and Information Technology set the 2027 deadline in order to speed up the government’s efforts to stop using such core chips in its telecommunications infrastructure. Chinese regulators also ordered state-owned mobile operators to check whether “non-Chinese” semiconductors are commonly used in their networks and to draft a timetable for replacement.

In the past, efforts by the Chinese telecommunication industry to wean itself from dependence on foreign semiconductors was to be hampered by a lack of quality chips produced domestically. Now, the quality of domestic chips has improved and their performance has become more reliable.

Currently, U.S. chipmakers Intel and AMD supply most of the core processors used in networking equipment in China and globally; geopolitical concerns now cloud their future business prospects in China. In October of last year, China Telecom purchased approximately 4,000 artificial intelligence servers, 53 percent of which used Intel processors. According to tender documents, the rest of the AI servers use Huawei’s processors. In the past, Intel chips accounted for a much higher share of server procurements.

Source: RFI Chinese, April 12, 2024