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Chinese officials directed the country's largest telecom carriers earlier this year to phase out foreign chips that are key to their networks by 2027, citing people familiar with the development.

The move would impact U.S. chip giants Intel and Advanced Micro Devices. Their shares were down more than 1.5% in premarket trading.

Intel declined to comment, while AMD did not respond.

Beijing has ramped up efforts to replace Western-made technology with domestic alternatives amid Sino-U.S. tensions, as Washington tightens curbs on high-tech exports to its rival.

State-owned enterprises were instructed in 2022 to replace office software systems with domestic products by 2027, the first time such specific deadlines were imposed, according to five brokerage firms that cited a September 2022 order from China's state asset regulator.

China's Ministry of Industry and Information Technology ordered state-owned mobile operators to inspect their networks for non-Chinese semiconductors and map out timelines to replace them.

Beijing had introduced guidelines to phase out U.S. chips from Intel and AMD from government personal computers and servers.

China was Intel's largest market last year and was responsible for more than 27% of its total revenue.

Procurements by Chinese telecom carriers show they are increasingly switching to domestic options. This has been made possible in part by the improved quality and stability of local chips.

Editor：Lulu

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