China has rolled out new guidelines that will phase out U.S. processors in government computers and servers, effectively blocking chips from Intel and AMD, the Financial Times reported on Sunday.
The procurement guidelines, unveiled on Dec. 26, are now being enforced and will also impact Microsoft‘s Windows operating system and foreign-made database software as they favor Chinese alternatives, the report said.
Government agencies higher the township level have been ordered to purchase “safe and reliable” processors and operating systems, FT said.
AMD declined to comment on the report while Intel did not immediately respond to CNBC’s request for comment.
This comes as China has been boosting its domestic semiconductor industry as it seeks to reduce reliance on foreign technology.
Semiconductors – critical components found in a wide range of devices from smartphones to medical equipment – have been at the center of a technology war between the U.S. and China.
U.S. has implemented export restrictions to cut off Beijing from key semiconductor equipment and technologies.
In October 2022, Washington introduced rules aimed at restricting China’s ability to access, obtain or manufacture advanced semiconductor chips amid concerns that China could use them for military purposes.
The U.S. then rolled out new regulations in October 2023 to prevent U.S. chip design firm Nvidia from selling advanced AI chips to China.
Since 2019, Chinese tech companies such as Huawei and China’s biggest chipmaker SMIC have been slapped with sanctions by the U.S. aimed at restricting their access to advanced technology. SMIC has also been unable to obtain extreme ultraviolet lithography machines critical for the making of advanced chips from firm ASML.
The U.S.-led tech embargo has helped boost revenues at China’s domestic chip equipment manufacturing firms. China’s top 10 equipment makers reported revenue rose 39% in the first half of 2023 as compared to a year ago, according to Shanghai-based CINNO Research.