The tech rivalry between China and the U.S. Is gearing up. Beijing, worried about its reliance on foreign-sourced hardware and software—and the leverage that it gives Washington—has embarked on a years-long drive to get non-Chinese tech out of the government. Now, officials are reportedly telling government departments to stop using some of the most widely-used U.S. Technologies: Microsoft Windows and Intel chips.
Beijing wants government departments to stop using computers and servers powered by microprocessors from foreign-based firms, the Financial Times reports, citing procurement guidelines from China’s finance ministry and its ministry of industry and information technology released on Dec. 26.
The new order requires government departments to only use “safe and reliable” processors. China’s state testing agency released a list of approved processors, also on Dec. 26, that does not include any foreign providers. Instead, the list only includes Chinese providers, like chips from Huawei’s subsidiary HiSilicon and the state-backed Phytium.
That would freeze out companies like Intel and AMD, which manufacture most of the processors that power personal computers and laptops.
Beijing also wants its departments to phase out Microsoft Windows in favor of locally-developed operating systems, the FT reports.
If a non-Chinese headquartered chip firm wanted to be considered “safe and reliable” by Chinese authorities, it would need to share complete R&D documentation and code in its application.
A ban on supplying China’s government departments could affect the earnings of companies like Intel and AMD. China was Intel’s biggest market in 2023, contributing just over a quarter of total sales. AMD generated 15% of its 2023 revenue from China.
Intel and AMD declined to comment. Microsoft did not immediately respond to a request for comment.
A ban on foreign-made microprocessors and operating systems would be the latest step in Beijing’s drive for technological self-sufficiency. Beijing reportedly ordered state employees to stop using Apple’s iPhones last year.
Chinese officials accelerated plans to replace foreign-sourced technology in its operations in 2021, after U.S. Sanctions hit the operations of Chinese tech company Huawei, Bloomberg reported at the time.
In addition to Chinese regulations, U.S.-headquartered chip firms are also contending with U.S. Export rules that prevent these companies from exporting their most advanced chips to Chinese companies. Chipmakers like Nvidia and AMD are trying to develop weaker chips for the Chinese market that align with U.S. Restrictions, but Washington has stymied these efforts.
Chinese customers are also increasingly turning to domestic chipmakers, due to concerns about future changes in U.S. Regulation.
