Intel, AMD hit out over reports of China limiting use of US chips

(Bloomberg) — Shares of Intel Corp. and Advanced Micro Devices Inc. fell Monday after reports that China adopted new guidelines to limit the use of U.S.-made microprocessors and servers in government computers.

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Intel was down 2.9% and AMD slipped less than 1% in New York.

The new rules mean chips made by companies will gradually be replaced by local alternatives, the Financial Times reported on Sunday, citing guidelines issued by the Finance Ministry and the Ministry of Industry and Information Technology on December 26.

Software provided by US companies including Microsoft Corp will also be replaced, the FT said. Still, there remains some flexibility for government agencies and state-owned enterprises to buy computers powered by foreign processor servers, the newspaper reported, citing two unnamed procurement officials.

Microsoft and Intel declined to comment to the FT, while AMD did not respond to a request for comment.

China has in the past years been pushing to eliminate key foreign technology from within its most sensitive organs. In 2022, it ordered central government agencies and state-backed corporations to replace foreign-branded personal computers with domestic alternatives within two years.

Last week, Bloomberg reported that the US is considering blacklisting several Chinese semiconductor firms linked to Huawei Technologies Co, a further escalation in Beijing’s campaign to corner and undermine its AI and semiconductor ambitions.

Read more: How China aims to counter US efforts at ‘containment’: QuickTake

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