China throws a bold challenge to US tech giants in semiconductor realm

China's strict procurement rules prioritize domestic technology, impacting global semiconductor markets amid U.S.-China rivalry, reshaping supply chains.

By Raunak Bose
New Update
China throws a bold challenge to US tech giants in semiconductor realm

China and USA flag

China's finance ministry and Ministry of Industry and Information Technology have recently issued an ordeal that calls for a shift away from utilizing foreign-sourced hardware and software. The emphasis is now on utilizing "safe and reliable" processors, which means shifting away from U.S. brands like Intel and AMD, towards domestic possibilities like Huawei's HiSilicon and Phytium.

China's "Xinchuang" strategy aims to remove its technological dependency on foreign countries. The major reason for this is that they wish to make their military technology free of any foreign parts which might result in a security threat for the country. 

Losing the Chinese market can be really painful for Intel and AMD as they will see a huge drop in their revenue and market value. China, a market for these companies might no longer be as accessible because of the strict market access requirements that involve sharing R&D documentation. The codes present further obstacles for the U.S. tech giants looking to sustain their presence in China.

China’s semiconductor drive set to reshape global markets

Recently, there has been a constant power struggle between China and the U.S. Now, The competition between China and the U.S. for securing dominance in the semiconductor business has heated up, affecting their respective businesses, consumers as well as governments globally. This situation has affected the global market as it alters the semiconductor industry's structure, causing major changes in the supply chain. 

HiSilicone and Phytium, Chinese Processors
Hisilicon and Pythium Chips(Image via Hisilicon and Pythium)

China is looking forward to increasing its semiconductor industry and reducing its dependency on foreign technology.​ The wider effects of this change highlight the intricacies of the technology sector and the ongoing rivalry between China and the United States, ranging from China’s statement to stop using iPhones to the U.S. government banning TikTok. To sum up, this digital competition marks a turning point in the assessment of global dynamics and strategic priorities.

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