China Reportedly Asks Telcos to Halt Using Foreign
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Posted On: 04/23/2024 5:45:26 PM
China Reportedly Asks Telcos to Halt Using Foreign-Sourced Chips
A Wall Street Journal report has revealed that Beijing recently directed some of China’s most prolific telecom carriers to stop using computer chips sourced from foreign manufacturers. According to the report, the Chinese government has instructed major telcos such as China Telecom, China Unicorn and China Mobile to phase out foreign chips from their operations by the year 2027.
The move is the latest in an escalating trade war between the United States and China that has seen both countries take steps to deprive each other of critical raw materials, limit exports and prevent trade between American and Chinese companies. With the U.S. already instructing local chip makers to stop selling semiconductor chips to companies in China, it seems the Asian country is now retaliating by banning American chips from its telecommunications industry.
The Wall Street Journal report noted that the move would impact American microchip giants Advanced Micro Devices (AMD) and Intel, which are among the largest chip makers on the globe. With China currently working to build out its world-leading 5G network, these two companies were poised to make a killing by supplying advanced computer chips to China. As a result, Beijing’s most recent move will likely cost Intel and AMD significant revenue and the immediate and near-term future as China expands the 5G network even further.
Beijing’s announcement is most likely in response to the American government’s decision to remove all Huawei telecom equipment from T-Mobile, Verizon and AT&T mobile networks because of security concerns. Although this isn’t the first time, the U.S. has targeted and removed Huawei infrastructure or products from its borders, the Chinese company is still one of the largest players in the worldwide telecom network market.
Published last week, the WSJ report on the matter noted that the Chinese Ministry of Industry and Information Technology instructed the country’s largest network providers to look for non-Chinese semiconductors in their networks and create a timeline for replacing them with Chinese-made alternatives. This would lock American chip makers AMD and Intel out of a major market and help China develop its own domestic semiconductor chip manufacturing industry.
Despite the east Asian country’s dominance in numerous technological fields, China is still overwhelmingly reliant on computer chips developed in the West. With a global semiconductor chip shortage coupled with regular export bans by Washington underscoring the need for a more resilient computer chips supply chain, the Asian nation is now working hard to replace Western technology with local alternatives.
State-owned enterprises, for instance, were ordered in 2022 to replace foreign office software systems with domestic offerings by 2027. The Financial Times reported last month that Beijing has also issued guidelines to guide the phase-out of Intel and AMD semiconductor chips from government personnel servers and computers.
It remains to be seen how companies with a commercial interest in the telecommunications industry in China, such as FingerMotion Inc. (NASDAQ: FNGR), could be impacted by this new directive by the Chinese government.
NOTE TO INVESTORS: The latest news and updates relating to FingerMotion Inc. (NASDAQ: FNGR) are available in the company’s newsroom at https://ibn.fm/FNGR
Please see full terms of use and disclaimers on the ChineseWire website applicable to all content provided by CW, wherever published or re-published: https://www.ChineseWire.com/Disclaimer
A Wall Street Journal report has revealed that Beijing recently directed some of China’s most prolific telecom carriers to stop using computer chips sourced from foreign manufacturers. According to the report, the Chinese government has instructed major telcos such as China Telecom, China Unicorn and China Mobile to phase out foreign chips from their operations by the year 2027.
The move is the latest in an escalating trade war between the United States and China that has seen both countries take steps to deprive each other of critical raw materials, limit exports and prevent trade between American and Chinese companies. With the U.S. already instructing local chip makers to stop selling semiconductor chips to companies in China, it seems the Asian country is now retaliating by banning American chips from its telecommunications industry.
The Wall Street Journal report noted that the move would impact American microchip giants Advanced Micro Devices (AMD) and Intel, which are among the largest chip makers on the globe. With China currently working to build out its world-leading 5G network, these two companies were poised to make a killing by supplying advanced computer chips to China. As a result, Beijing’s most recent move will likely cost Intel and AMD significant revenue and the immediate and near-term future as China expands the 5G network even further.
Beijing’s announcement is most likely in response to the American government’s decision to remove all Huawei telecom equipment from T-Mobile, Verizon and AT&T mobile networks because of security concerns. Although this isn’t the first time, the U.S. has targeted and removed Huawei infrastructure or products from its borders, the Chinese company is still one of the largest players in the worldwide telecom network market.
Published last week, the WSJ report on the matter noted that the Chinese Ministry of Industry and Information Technology instructed the country’s largest network providers to look for non-Chinese semiconductors in their networks and create a timeline for replacing them with Chinese-made alternatives. This would lock American chip makers AMD and Intel out of a major market and help China develop its own domestic semiconductor chip manufacturing industry.
Despite the east Asian country’s dominance in numerous technological fields, China is still overwhelmingly reliant on computer chips developed in the West. With a global semiconductor chip shortage coupled with regular export bans by Washington underscoring the need for a more resilient computer chips supply chain, the Asian nation is now working hard to replace Western technology with local alternatives.
State-owned enterprises, for instance, were ordered in 2022 to replace foreign office software systems with domestic offerings by 2027. The Financial Times reported last month that Beijing has also issued guidelines to guide the phase-out of Intel and AMD semiconductor chips from government personnel servers and computers.
It remains to be seen how companies with a commercial interest in the telecommunications industry in China, such as FingerMotion Inc. (NASDAQ: FNGR), could be impacted by this new directive by the Chinese government.
NOTE TO INVESTORS: The latest news and updates relating to FingerMotion Inc. (NASDAQ: FNGR) are available in the company’s newsroom at https://ibn.fm/FNGR
Please see full terms of use and disclaimers on the ChineseWire website applicable to all content provided by CW, wherever published or re-published: https://www.ChineseWire.com/Disclaimer
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