China Aims to Eliminate American Chip Makers from Its Telecom Infrastructure by 2027
China’s Push for Tech Independence
China is stepping up efforts to reduce its dependence on foreign technology by targeting the exclusion of American chip makers from its telecom infrastructure by 2027, as reported by the Wall Street Journal.
Government Directive to Telecom Carriers
The Ministry of Industry and Information Technology (MIIT) instructed major telecom carriers earlier this year to phase out foreign processors crucial to their networks by the specified deadline.
Impact on American Chip Giants
This directive is expected to impact American chip giants Intel Corp and Advanced Micro Devices, with shares of both companies falling in early New York trading.
Transition to Domestic Alternatives
State-owned mobile operators have been tasked with evaluating their networks for non-Chinese semiconductors and devising plans to replace them with domestic alternatives.
Quality Improvements in Local Chips
Previous efforts by the Chinese government to reduce reliance on foreign semiconductors were hindered by the lack of domestically produced chips of comparable quality. Recent advancements in local chip quality have now made the transition to domestic alternatives feasible for telecom carriers.
National Security Concerns
U.S. lawmakers have imposed restrictions on Chinese telecom equipment and high-end AI chips from American companies, citing national security concerns.
Boosting Domestic Supply Chains
Chinese authorities have long been striving to enhance domestic supply chains and decrease reliance on foreign suppliers. Similar directives in other sectors have already resulted in a gradual decline in market share for U.S. software and hardware firms in China.
