Chinese officials directed the country’s largest telecom carriers to phase out foreign chips that are critical to their networks, the Wall Street Journal reported on Friday, citing people familiar with the matter.
The move would impact U.S. chip giants Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD), the report added. Their shares slipped nearly 4% in early trading.
Beijing has stepped up efforts to replace Western technology following planned curbs by the U.S. on the world’s second-largest economy. Chinese President Xi Jinping has stressed the requirement for self-reliance in technology to curtail the use of foreign tech.
Chinese regulators have instructed state-owned mobile operators to examine their networks for non-Chinese semiconductors and draw out timelines to replace them, the report added.
China was Intel’s (INTC) largest market last year, accounting for more than 27% of its revenue. For AMD (AMD), China was its third-largest market, contributing 15% to its revenue.
According to the report, Chinese telecom carriers are switching to more domestic alternatives, a move made possible by their improving quality and more stable performance.