The FCC banned US carriers, who were then beginning to roll out their 5G networks, from using subsidies to purchase equipment from businesses that they considered to be a threat to national security back in 2019. Top on the list were Chinese firms ZTE and Huawei. China is currently putting this same policy into effect: The Ministry of Industry and Information Technology reportedly ordered state-owned mobile operators—including the two largest carriers in the nation—to phase out foreign chips, as reported by the Wall Street Journal.
The regulator has reportedly told China Mobile and China Telecom, along with all other state-owned carriers, to check their networks for any semiconductors that weren’t manufactured locally. It then asked them to determine a timeline to replace them. The Journal’s sources said that it’s now possible to switch to domestic chips, thanks to improvements in their quality and performance over the past few years. Chinese companies like Huawei were forced to design their own semiconductors after getting hit by trade sanctions, in order to be self-sufficient and in case they’re no longer able to import chips from the US and its allies. The Chinese government, in turn, is supporting their efforts and is raising $40 billion in funds to help the domestic semiconductor industry.
This latest move by China follows its ban on the use of Intel and AMD processors in government computers. Prior to that, China also prohibited the use of US-made tech in all government institutions and public bodies and banned local firms from buying chips made by US memory manufacturer Micron Technology. Intel and AMD will most likely suffer heavy losses from this latest development, since they provide most of the chips used for mobile networks around the world. China was also Intel’s largest market in 2023 and accounted for 27 percent of its revenue. In addition to losing some of their biggest customers, the companies will now have to face competition from Chinese manufacturers, as well.
