China Mandates Removal of Intel and AMD Chips from Government PCs

Key Points

• China introduces guidelines to phase out Intel (INTC) and AMD microprocessors from government PCs and servers.
• The guidelines also aim to replace Microsoft's Windows and foreign database software with domestic alternatives.
• The U.S. seeks to boost domestic semiconductor production with the 2022 CHIPS and Science Act.

In this news

In a significant move that could impact global semiconductor markets, China has introduced new guidelines aimed at eliminating the use of U.S. microprocessors, specifically those from Intel (INTC) and AMD, in government personal computers and servers. The Financial Times reported on March 24 that the procurement guidance, which was unveiled last December, also targets Microsoft's Windows operating system and foreign-made database software, advocating for domestic alternatives.

Chinese officials have already started implementing these guidelines, which mandate that government agencies above the township level prioritize 'safe and reliable' processors and operating systems in their procurement processes. The move comes amidst heightened efforts by the U.S. to strengthen domestic semiconductor production and reduce dependence on foreign technology, particularly from China and Taiwan. The Biden administration's 2022 CHIPS and Science Act is a testament to this strategy, offering financial support and subsidies for the production of advanced chips within the United States.

While Intel (INTC) and AMD have yet to respond to these developments, the implications of China's decision could reverberate through the tech industry, potentially accelerating the bifurcation of the global tech supply chain. This decision underscores the growing tech rivalry between the U.S. and China and may lead to increased innovation and competition in the semiconductor space as each country strives for technological self-sufficiency.