Semiconductors are at the center of the U.S.-China technology trade war.
William Porter | Stocks | Getty Images
shares Advanced Micro Devices and Intel After Friday’s decline “Wall Street Journal” reports China is ordering the country’s largest telecom operator to stop using foreign chips.
Chinese officials issued a directive earlier this year requiring telecom systems to replace non-Chinese core processors by 2027, the Wall Street Journal reported, citing people familiar with the matter. According to reports, the directive will affect AMD and Intel.
Both stocks were down 4% Friday afternoon.
Intel declined to comment on the report. AMD did not immediately respond to a request for comment.
China accounts for 27% of Intel income By 2023, it will become the company’s largest market. 15% of AMD’s sales come from China (including Hong Kong) last year. Their reliance on China underscores the continued importance of the world’s second-largest economy, despite U.S. regulations aimed at limiting chip exports to China and Beijing’s efforts to reduce its reliance on foreign technology.
China enacted new guidelines in December to remove U.S. chips from government computers and servers, blocking processors from AMD and Intel, the Financial Times reported last month.
In October 2022, the United States enacted rules aimed at restricting China’s access to advanced American chips, especially those critical to artificial intelligence technology. Late last year, the United States announced new restrictions to block the sale of more artificial intelligence chips to China in an attempt to close loopholes in previous orders.
AMD failed to win U.S. approval for its artificial intelligence chips designed for China and needs to apply for an export license, Bloomberg reported last month.
Intel has reportedly survived AMD’s efforts to block the sale of hundreds of millions of dollars worth of laptop chips to Chinese telecoms company Huawei, which has been sanctioned by the United States.