China Blocks Intel And AMD Chips As Billions Hang In Balance: Report

In 2023, 27 percent of Intel’s total sales came from China, while 15 percent of AMD’s total revenue was attributed to China last year.

AMD and Intel processors will be phased out of Chinese government PCs and servers in a move by China to push use of in-country technology.

Additionally, China’s new tech procurement guidance will sideline Microsoft Windows operating system and database software in favor of China-based technology options, according to the Financial Times.

The new guidelines were created a few months ago by China’s Ministry of Industry and Information Technology (MIIT) but only recently implemented. MIIT ordered government agencies to make the switch to Chinese hardware and software products—such as Huawei—when purchasing IT.

China Is A Huge Market For Intel, AMD

The move by the Chinese government could have major impact on Intel and AMD, which are both headquartered in Santa Clara, Calif.

For example, Intel revenue outside the U.S. accounted for 74 percent of the company’s revenue in 2023, according to the Intel’s 2023 annual report. China, specifically, accounted for 27 percent of Intel’s total $54.2 billion in revenue last year.

Looking at AMD, approximately 15 percent of AMD’s total revenue of $22.7 billion in 2023 came via China.

CRN has reached out to AMD and Intel but did not receive a response by press time.

Last week, Intel CEO Pat Gelsinger met with U.S. President Joe Biden and other U.S. government officials to discuss billions in direct funding under the CHIPS and Science Act for U.S.-based chip manufacturing companies.

“With this funding, we will build innovative new chips of the future, vibrant communities and local economies, and a stronger, more secure semiconductor supply chain out of America,” said Gelsinger on LinkedIn.

The CHIPS And Science Act

The CHIPS and Science Act is a U.S. federal funding package for commercial chip and semiconductor projects in Arizona, New Mexico, Ohio and Oregon.

Intel stands to receive up to $8.5 billion in a funding package that was passed in 2022.

“Restoring American leadership in semiconductors is more than a responsibility—it is our calling,” said Gelsinger. “I am grateful for the trust that has been placed in Intel Corporation and other recipients by the U.S. government to deliver on the promise of restoring American semiconductor leadership.”

It is key to note that the U.S. has banned a wide range of Chinese companies from selling inside America over the past few years, ranging from telecommunications equipment providers to microprocessor manufacturers.

Additionally, the Biden administration blocked U.S. companies like Nvidia from selling chips and AI technologies to China.