China to Shift Government PCs from AMD & Intel CPUs to Domestic Chips, Report Says

China aims to replace American processors in government computers and servers, focusing on domestic technology industry enhancement and reducing reliance on foreign companies.

Boosts domestic technology industry
Reduces reliance on foreign companies
Promotes self-sufficiency in critical sectors

China is making a significant policy shift by aiming to remove American processors from its government computers and servers. This move, reported by Financial Times, is part of China’s broader strategy to enhance its domestic technology industry and reduce reliance on foreign companies. The new procurement guidelines require government entities to prioritize “safe and reliable” processors and operating systems, effectively excluding processors from AMD and Intel. Instead, the approved list exclusively features Chinese companies, including Huawei and Phytium, despite their presence on the U.S. export blacklist.

China’s push for technological autonomy extends beyond government agencies to state-owned enterprises, which have been instructed to transition to domestic CPUs by 2027. Progress reports on IT system overhauls will be submitted quarterly, emphasizing the adoption of local alternatives. While some foreign technology will still be allowed, the focus is clearly on embracing homegrown solutions.

This shift away from foreign hardware is expected to have a notable impact on American tech giants. China is a crucial market for AMD and Intel, accounting for a significant portion of their sales. Microsoft also acknowledges that China contributes to its revenue, although specific figures are not disclosed. While government sales represent only a fraction of overall China sales, the Chinese government remains a substantial customer.

Analysts predict that the transition to domestic processors will progress more swiftly for server processors than for client PCs due to the less complex software ecosystem involved. They estimate that China will need to invest approximately $91 billion between 2023 and 2027 to overhaul its government IT infrastructure and related industries.

China’s pursuit of technological self-reliance in critical sectors such as the military, government, and state-owned enterprises is evident in these new guidelines. By prioritizing domestic processors and operating systems, China aims to bolster its own technology industry while reducing dependence on American chipmakers. This policy shift marks a significant step in China’s quest for technological autonomy.

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Background Information

About AMD: AMD, a large player in the semiconductor industry is known for its powerful processors and graphic solutions, AMD has consistently pushed the boundaries of performance, efficiency, and user experience. With a customer-centric approach, the company has cultivated a reputation for delivering high-performance solutions that cater to the needs of gamers, professionals, and general users. AMD's Ryzen series of processors have redefined the landscape of desktop and laptop computing, offering impressive multi-core performance and competitive pricing that has challenged the dominance of its competitors. Complementing its processor expertise, AMD's Radeon graphics cards have also earned accolades for their efficiency and exceptional graphical capabilities, making them a favored choice among gamers and content creators. The company's commitment to innovation and technology continues to shape the client computing landscape, providing users with powerful tools to fuel their digital endeavors.

About Intel: Intel Corporation, a global technology leader, is for its semiconductor innovations that power computing and communication devices worldwide. As a pioneer in microprocessor technology, Intel has left an indelible mark on the evolution of computing with its processors that drive everything from PCs to data centers and beyond. With a history of advancements, Intel's relentless pursuit of innovation continues to shape the digital landscape, offering solutions that empower businesses and individuals to achieve new levels of productivity and connectivity.

About Microsoft: Microsoft, founded by Bill Gates and Paul Allen in 1975 in Redmond, Washington, USA, is a technology giant known for its wide range of software products, including the Windows operating system, Office productivity suite, and cloud services like Azure. Microsoft also manufactures hardware, such as the Surface line of laptops and tablets, Xbox gaming consoles, and accessories.