US-made processors from Intel and AMD will be phased out of government PCs and servers under new guidelines from the Chinese government and replaced with hardware made in China.

According to a report in the FT, the new procurement guidelines also seek to restrict the use of Microsoft’s Windows operating system and foreign-made database software.

The new guidelines were published by the Ministry of Industry and Information Technology (MIIT) on December 26, 2023, giving an order for government agencies to make the switch to “safe and reliable” solutions when purchasing technology.

On the same day, a list was published by China's Information Security Evaluation Center naming the government-approved technologies. It includes 18 CPUs, six operating systems, and 11 centralized database solutions, all of which have been developed by Chinese companies.

Chips from Huawei and the Chinese state-backed group Phytium were included on the list of approved processors. Both companies are currently on the US government’s export blacklist.

According to the FT’s report, China was Intel’s largest market in 2023, accounting for 27 percent of the company’s $54 billion in sales. During that same year, 15 percent of AMD’s $23bn sales came from China.

Microsoft president Brad Smith told Congress last year that China provided 1.5 percent of the company’s revenues.

Since the US government ramped up sanctions related to the export of advanced semiconductors to China, the country has shifted its focus toward domestic chip production.

In 2023, China purchased around $40 billion worth of chip manufacturing products in an effort to shore up its semiconductor supply chain in the wake of US sanctions.