US chips ‘no longer safe’ to buy, Chinese industry bodies say

Beijing: Chinese companies should be wary of buying U.S. chips because they are “no longer safe” and instead buy locally, four of the country’s main industry associations said Tuesday in a rare coordinated response to Washington’s restrictions.

The associations, which issued similarly worded statements shortly after another, did not explain in detail why the American chips were dangerous or unreliable.

The associations cover some of China’s largest industries, including telecommunications, digital economy, automotive and semiconductors, and together count 6,400 companies among their members.

Their advice could impact US chipmaking giants like Nvidia, AMD and Intel who, despite export controls, have managed to continue selling their products in the Chinese market.

It could also escalate trade tensions between the two countries as President-elect Donald Trump returns to the White House.

The Internet Society of China urged domestic companies to think carefully before purchasing American chips and seek to expand cooperation with chip companies from countries and regions other than the United States, according to its official WeChat account .

He also encouraged domestic companies to “proactively” use chips produced by domestic and foreign companies in China.

US controls on chip exports have caused “substantial harm” to the health and development of China’s internet industry, it adds.

The China Association of Communications Companies said it no longer considers U.S. chip products to be reliable or secure and that the Chinese government should investigate the supply chain security of China’s critical information infrastructure. country.

The warnings come after the United States launched its third crackdown in three years on China’s semiconductor industry on Monday, limiting exports to 140 companies, including chip equipment maker Naura Technology Group.

They echo China’s treatment of U.S. memory chip maker Micron, which came under cybersecurity scrutiny last year, shortly after the U.S. imposed controls on technology exports of chip manufacturing to China.

China then banned Micron from selling its chips to key domestic industries, impacting a double-digit percentage of its total revenue.

Intel has also come under scrutiny. In October, another influential industry group, the China Cybersecurity Association, called for a review of Intel’s product security, saying the U.S. chipmaker had “consistently harmed” the country’s security and national interests .