Semiconductors are a critical focal point in the ongoing technology trade dispute between the U.S. and China. Shares of Advanced Micro Devices and Intel decreased on Friday following a report by The Wall Street Journal stating that China has instructed its largest telecommunications carriers to stop using foreign chips.
The Chinese government issued this directive earlier this year to have the telecom systems replace non-Chinese core processors by 2027, affecting AMD and Intel. Both stocks saw declines of up to 4% on Friday afternoon. While Intel chose not to comment on the report, AMD did not immediately respond to requests for comments.
China represents a significant portion of Intel’s revenue, accounting for 27% in 2023, making it their largest market. AMD generated 15% of sales from China last year. The country’s reliance on China highlights the importance of the second-largest economy globally, despite U.S. regulations aimed at limiting chip exports to China and China’s efforts to reduce its reliance on foreign technology.
China implemented new guidelines in December to exclude U.S. chips from government computers and servers, preventing the use of processors from AMD and Intel, as reported by the Financial Times. In October 2022, the U.S. established rules to restrict China’s access to advanced American chips, particularly those crucial to artificial intelligence technology.
AMD faced challenges in obtaining U.S. approval for an AI chip designed for China and will need to apply for an export license, while Intel reportedly continued selling laptop chips to the U.S.-sanctioned Chinese telecom company Huawei despite opposition from AMD.
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Semiconductors are a key focus in the technology trade war between the U.S. and China, with Chinese officials reportedly ordering the country’s largest telecommunications carriers to stop using foreign chips by 2027. This directive would impact companies like Advanced Micro Devices (AMD) and Intel, causing their stock prices to dip. Despite U.S. regulations aimed at curbing chip exports to China and China’s efforts to be less dependent on foreign technology, both companies rely on China for a significant portion of their revenue. The U.S. has instituted rules to limit China’s access to advanced American chips, especially those critical to artificial intelligence technology, and AMD has failed to get U.S. approval for an AI chip designed for China. Intel has reportedly continued to sell chips to U.S.-sanctioned Chinese telecom company Huawei.
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