China has directed the country’s largest telecom carriers earlier this year to phase out foreign chips that are key to their networks by 2027, a news report in the Wall Street Journal indicated. Leading telecoms are China Mobile, China Telecom and China Unicom.
The above chart from BCG & Semiconductor Industry Association report indicates the semiconductor sales by category across sectors.
The move would impact U.S. chip giants Intel and Advanced Micro Devices (AMD), according to news reports. Since telecoms in China are in the process of expanding their 5G network, the revenue hit on technology companies such as Intel and AMD will be significant. China is the largest 5G infrastructure market. Nokia, Ericsson, Samsung, etc. aim for large telecom network deals in China.
The development will be seen as a well-planned response to the decision of the United States to remove Huawei’s telecom equipment from mobile networks of AT&T, Verizon and T-Mobile, among others, due to security concerns. Despite the ban on Huawei, it continues to lead the global telecom network market.
The WSJ report published on Friday indicated that China’s Ministry of Industry and Information Technology ordered state-owned mobile operators to inspect their networks for non-Chinese semiconductors and map out timelines to replace them.
Beijing has enhanced efforts to replace Western-made technology with domestic alternatives amid Sino-U.S. trade tensions, as Washington tightens curbs on high-tech exports to its rival, Reuters reported late last year.
State-owned enterprises were instructed in 2022 to replace office software systems with domestic products by 2027, the first time such specific deadlines were imposed, according to five brokerage firms that cited a September 2022 order from China’s state asset regulator.
Beijing had already introduced guidelines to phase out U.S. chips from Intel and AMD from government personal computers and servers, the Financial Times had reported in March.
But Huawei MateBook D 14 laptop is powered by 3th Gen Intel Core processor. Software major Microsoft has extended its support with Windows 11 Home for Huawei MateBook D 14 laptops.
China was Intel’s largest market last year and was responsible for more than 27 percent of Intel’s total revenue.
Procurements by Chinese telecom carriers show they are increasingly switching to domestic options. This has been made possible in part by the improved quality and stability of local chips, according to the WSJ report.
TelecomLead.com News Desk
