Chinese industry groups warn against US chips

Four major Chinese industry associations have advised local companies to be cautious about purchasing chips from the United States, suggesting that they are "no longer safe" and to consider sourcing locally.

This guidance was issued on Tuesday and involves associations from key sectors such as telecommunications, digital economy, automotive, and semiconductors.

The warning could potentially affect major U.S. chip manufacturers like Nvidia (NASDAQ:NVDA ), Advanced Micro Devices (NASDAQ:AMD ), and Intel (NASDAQ:INTC ), which have continued to do business in China despite export controls.

The associations have not provided specific reasons for deeming U.S. chips as unsafe or unreliable. Nevertheless, the Internet Society of China has publicly prompted domestic companies to deliberate thoroughly before procuring U.S. chips. This statement was made on their official WeChat account.

Moreover, the Internet Society of China has recommended that local firms broaden their cooperation with chip companies from regions and countries other than the United States. They also urged companies to actively use chips made by both Chinese and foreign-owned enterprises within China.

The U.S. chip export controls have been cited as causing "substantial harm" to the development and health of China's internet sector.

This development follows the recent actions taken by the United States on Monday, targeting China’s semiconductor industry. The U.S. government has imposed export restrictions on 140 Chinese entities, including chip equipment manufacturer Naura Technology Group, marking the third crackdown in as many years.

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Source: Investing.com