China plans to eliminate foreign chips from its telecom systems, says report

Amid U.S.-China trade tensions, the Chinese authorities reportedly plan to cut out foreign chips from its telecom systems. If true, this would be a big bombshell for firms like Intel and AMD who are supplying chips in bulk despite U.S. restrictions.

New report says that with the onset of this year, China directed country’s largest telecom carriers to fully rip and replace foreign chips out of core systems by 2027.

The orders were placed by China’s Ministry of Industry and Information Technology. It further quotes that telecom operators need to consult, check, and create an accurate timeline for the removal of foreign-made processors from their equipment.

It seems a big move played by China in response to the U.S. government which is constantly blocking Chinese firms and tech vendors from entering the global market.

Shares of Intel and AMD (Advanced Micro Devices) already dropped by 1.3% and 2% respectively in New York this Friday. Meanwhile, a major action appears to be on the way, that can hit both of these chipmakers more strongly in the coming days.

China to cut out foreign chips from telecom (Image Credits: Intel)

If not foreign chips, what else?

The report mentions that China aims to gradually shift to the native chip options rather than relying upon foreign goods. Huawei, for instance, is a noteworthy example as the company made significant improvements in the quality and stability of its chips.

Huawei is also looking forward to PC-dedicated chips that can help the native region become self-reliant and drop the use of Intel or AMD processors for laptops, desktops, and other devices. Overall, China is making efforts to boost native chip production and become more independent in the time ahead.

(Source – The Wall Street Journal)