Economists and politicians love to talk about “the free market” as some kind of capitalist ideal. But when countries start duking it out with policy instead of bombs, trade restrictions are often their first weapon of choice. Responding to heavy chip import restrictions from the US, China has now banned purchases of Intel, AMD, and Microsoft products for use in government computers.
Under the guise of transitioning to “safe and reliable” hardware and software, the CCP’s Information Technology Security Evaluation Center has created a list of companies that government agencies are allowed to purchase from. This list notably excludes the biggest PC chipmakers in the world, Intel and AMD, and the creator of the leading operating system, Microsoft. All three companies are based in the US.
Naturally, the list of safe and reliable vendors includes Chinese competitors like Huawei. The Financial Times reports that the guidelines were unveiled in December of last year, but have finally begun to be enforced as policy this week. All government agencies above the township level will be held to this standard, but the ban does not apply to consumers or corporations.
Microsoft is predicted to see a minimal hit in response to this news (the Chinese government unveiled an official home-grown Linux variant last year), but China drives tens of billions in sales for both AMD and Intel. While it will be a big adjustment for both companies, it’s hardly surprising given recent political trends.
The United States has attempted to cripple Chinese competition to the emerging American AI market by banning sales of some of the most powerful CPU and GPU chips to the country, including some consumer-grade alternatives like high-powered graphics cards. The US is also bolstering investment in domestic chip production with the CHIPS Act, hoping to reduce reliance on production out of Taiwan.
The stock prices of Intel, AMD, and Nvidia all fell slightly following the news.
Author: Michael Crider, Staff Writer, PCWorld
Michael is a 10-year veteran of technology journalism, covering everything from Apple to ZTE. On PCWorld he's the resident keyboard nut, always using a new one for a review and building a new mechanical board or expanding his desktop "battlestation" in his off hours. Michael's previous bylines include Android Police, Digital Trends, Wired, Lifehacker, and How-To Geek, and he's covered events like CES and Mobile World Congress live. Michael lives in Pennsylvania where he's always looking forward to his next kayaking trip.