Recent restrictions imposed by China on AMD and Intel may have profound implications for the future performance and strategic positioning of both companies.

Policy Changes in China

Reportedly, China has instructed its largest telecommunications operators to phase out non-Chinese core processors (CPUs) by 2027. This new policy directly affects two major chip manufacturers from the United States—AMD and Intel.

Stock Market Reaction

In response to this news, AMD's stock price fell by 4.2%, closing at $163.28, while Intel's stock price dropped by 5.2%, closing at $35.69. This reflects the market's rapid response to the changes in Chinese policy.

Market Dependence

The Chinese market is crucial for both Intel and AMD, with China accounting for 27% of Intel's revenue in 2023 and 15% of AMD's sales (including Hong Kong). This indicates that despite US attempts to restrict chip exports to China, the Chinese market remains highly significant for these American companies.

Technological Warfare

In October 2022, the US implemented new regulations restricting China's access to advanced American chips, particularly those crucial for artificial intelligence technology. Meanwhile, China introduced new restrictions at the end of last year aimed at removing US chips from its government computers and servers.

Trade and Technological Conflict

The implementation of these policies reflects the ongoing tensions between the US and China in the technological domain, which may affect the future trajectory of global supply chains and technological innovation.