In China they are going to look for replacements for chips from Intel and AMD. So far only in government institutions
We have already written about the fact that China is actively developing the domestic chip development and production industry. The state has allocated huge funds for the formation of its own electronics industry, independent from other countries. And now, it seems, the Chinese are gradually abandoning third-party microcircuits. True, not always to please our own, but there are still many alternatives.
What's happening in China?
A few days ago it became known that the country's authorities announced the need to move away from the use of Intel and AMD processors in government agencies. We are talking about the development of an import substitution strategy, which has been relevant in China for several years now. Not so long ago, the Chinese decided to replace Windows with their own OS, and now they have started working on processors.
The country's Ministry of Industry has issued a recommendation to government agencies calling for an alternative to Intel and AMD chips. Not “yesterday”, about three years are given for this. The same recommendation states that the replacement should preferably be Chinese, for example, it could be processors from Huawei and Phytim. At the moment, the department has already approved 18 different chips as a replacement for chips from Intel and AMD.
The implementation of the strategy must be completed no later than 2027, that is, three years are given for this, as mentioned above. In addition, the state proposes to replace the remaining foreign services and software.
What does this mean for the industry?
The recommendations of the Ministry of Industry will be important both for companies, i.e. Intel and AMD, and for China itself. The first will most likely have to lose a very profitable market with a huge number of buyers. And the second is to spend billions of US dollars to replace imported equipment and software with domestic ones.
As for American companies, they supply chips worth billions of dollars to China – now revenue has decreased somewhat due to trade sanctions, but it is still very decent. Thus, Intel's sales in China account for about 27% of the corporation's total revenue. As for AMD, in its case this figure is 15%.
Well, China will have to spend almost $100 billion to replace chips, equipment, and software. And this is only a partial modernization for now, since a complete renovation of the infrastructure will require almost trillions of dollars, which the state is not yet ready to allocate – there are other tasks that require urgent decision-making.
Does China have its own chips?
Yes, if we are talking about processors, then Chinese factories can produce chips using technologies up to the 7 nm process technology. Now in China they are mastering more modern developments. For example, China's largest contract chip manufacturer SMIC is indeed literally one step away from releasing new processors.
They were developed by another company, a subsidiary of Huawei, HiSilicon. As it turned out, the chips will be produced at two new factories built in Shanghai. First, these processes will be installed in flagship smartphone models. If everything goes as planned, then SMIC will begin production of more serious chips that are intended for servers. The Chinese also plan to begin developing and, possibly, supplying artificial intelligence accelerators to the foreign market.
By the way, SMIC adheres to several areas of work to deploy modern chip production in China:
purchase of lithographic machines from previous years that are not subject to sanctions
use of modern equipment imported into the country earlier
development of software for chip design
creating your own lithographs, albeit using outdated technologies
In most of these areas, the PRC has already achieved success, and quite significant results have been achieved by both Huawei and SMIC. As for the latter, she was definitely able to master the 7nm process technology, albeit for smartphones. This company has also mastered older 28-nm and 14-nm technologies.
Thus, China announced the production of 14-nm chips within the country a little over a year ago. The state helps SMIC, and not only this company, very significant funds are allocated.
There are other organizations that are developing processors. Here you can remember LoongSon. For several years now, it has been producing entirely domestic chips based on the LoongArch architecture. It was developed from scratch, and it is not based on American technologies. Moreover, the company's products cannot be sold abroad, since they are considered strategically important.
What else?
The Chinese plan to gradually abandon not only chips that are based on American technologies, but also software. It will all start, as in the case of processors, with government agencies.
Now the Chinese are gradually choosing the necessary software from the proposed options. There are several well-known ones outside the country, including UOS, Kylin Linux, Deepin Linux.
As far as one can understand, China will not stop there and will gradually update the entire domestic infrastructure, replacing foreign technologies with Chinese ones. We will find out in the near future whether these plans will come true.
