China has mandated that all domestic data centers begin using more Chinese-produced processors as part of an increasing initiative to make China self-sufficient when it comes to silicon, as reported by SCMP. This comes at a time of enormous global investment in datacenters, AI, and processor production, with an increased drive towards self-sufficiency and nationalistic stances on cutting-edge technology. Moving forward, publicly-owned Chinese datacenter firms will reportedly be required to source more than 50% of their chips from domestic producers, according to people said to be familiar with the matter. This comes from guidelines initially published last March by the Shanghai municipality. This order appears to have now been extended to the wider country and could have a large impact on Chinese chip adoption and investment, as well as the country’s overall interest in US processors. Major US companies like Nvidia and AMD have faced federal hurdles to selling their latest chips to Chinese firms for some time, and are currently only able to sell watered-down versions of their latest designs, all while giving the US government a 15% cut of any proceeds, per terms of the latest White House deal. Although it seems that the US government does want to maintain favorable trading relationships with China and its domestic companies, the process has been fraught with turbulence in recent months, raising concerns that companies unable to source the chips they needed would turn to other avenues to acquire them. That’s led to smuggling, but also may be part of the drive towards more local chip production in China.

Full report : China has mandated that its tech firms use at least 50% semiconductors made by Chinese producers.