China Orders Telecoms to End Use of US Chips by 2027

China’s largest telecom firms were ordered earlier this year to phase out foreign computer chips from their networks by 2027.

That news, which confirms and expands on reports from recent months, came from the Wall Street Journal on Friday, which cited people familiar with the development.

The move will hit US chip giants Intel and Advanced Micro Devices, as the Financial Times, TrendForce and other outlets said recently. Asia Financial reported in late March that these retaliatory bans would cost the US chip firms billions.

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Shares of these companies were down more than 1.5% in premarket trading. Intel and AMD did not respond to Reuters’ requests for comment.

Beijing has ramped up efforts to replace Western-made technology with domestic alternatives amid intense Sino-US trade tensions, as Washington continues to tighten curbs on high-tech exports to its rival.

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.

Reuters could not independently verify the order.

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, the WSJ report said.

Beijing had introduced guidelines to phase out US chips from Intel and AMD from government personal computers and servers, the Financial Times had reported in March.

China was Intel’s largest market last year and was responsible for more than 27% 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.