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Tech War Intensifies: China to Abandon Foreign CPU Use

Daniel Kim Views  

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The Chinese government reportedly instructed domestic telecommunications companies to cease using foreign chips in their network equipment by 2027.

The Wall Street Journal (WSJ) reported this on December 12th (local time), citing a knowledgeable source.

According to the report, China’s Ministry of Industry and Information Technology ordered the country’s three major state-owned mobile service providers, China Mobile, China Unicom, and China Telecom, to inspect their equipment and gradually replace foreign-made Central Processing Units (CPUs) earlier this year.

This move is seen as a countermeasure by China to reduce its reliance on American technology for crucial infrastructure, as the U.S. government recently blocked China’s access to critical technologies such as advanced semiconductors.

As a result, Chinese telecom companies must gradually phase out foreign-made CPUs, the core of their networks, by 2027.

The WSJ predicted this measure would significantly impact major U.S. semiconductor companies like Intel and AMD, which have virtually monopolized the global server CPU supply.

According to market research firm TrendForce, Intel currently holds a 71% share of the server CPU market this year, with AMD in second place at 23%.

Chinese mobile service providers have also been large-scale purchasers of Intel and AMD server CPUs as they expand their data centers to meet the demand for cloud computing.

Upon the news of China’s regulatory measures, Intel and AMD’s stock prices dropped mid-session by around 4% at 1 p.m. that day.

Daniel Kim
content@viewusglobal.com

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