China is taking decisive steps to phase out foreign-made processors from its government computers and servers, signalling a significant shift in its technology policy. New procurement guidelines target the removal of Intel and AMD chips in favour of home-grown alternatives, with the move also extending to foreign software such as Microsoft Windows and overseas database systems.
Push for “Safe and Reliable” Domestic Solutions
Under the new rules, government agencies at the township level and above will be required to source processors and operating systems that meet “safe and reliable” standards — a criterion widely interpreted as favouring Chinese-made technologies. Domestic semiconductor producers and software developers, including major players like Huawei, stand to benefit from this change.
The initiative also calls for the adoption of locally developed operating systems and database software, aiming to reduce the state’s reliance on foreign technology providers. This could pave the way for a broader market share for Chinese companies working on chipsets, storage systems, and enterprise software solutions.
Impact on Global Semiconductor Competition
The policy shift comes amid ongoing US export restrictions on advanced semiconductor technologies to China, particularly in artificial intelligence applications. These restrictions have already impacted Intel and AMD, limiting their ability to sell high-end chips to Chinese customers.
With China representing a substantial portion of Intel’s and AMD’s revenues, the gradual removal of their products from government systems could deal a considerable blow to their long-term prospects in the region. Meanwhile, the Chinese semiconductor industry is expected to gain momentum, accelerating the development, testing, and deployment of domestic chips for both government and commercial use.
Ultimately, this strategic move reflects Beijing’s determination to achieve technological self-reliance and shield its critical infrastructure from geopolitical risks — a trend that may further reshape the global semiconductor supply chain.