A warning from Chinese industry groups to local companies to avoid US chips could have a negative impact on a variety of chipmakers including Qualcomm Inc (NASDAQ:QCOM, ETR:QCI), Intel Corp (NASDAQ:INTC, ETR:INL) and Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD), analysts at Wedbush believe.
Four major Chinese industry associations have advised local companies to avoid purchasing US chips, stating they are “no longer safe.” They instead encouraged companies to opt for domestic or non-US chips.
Wedbush wrote in a note to clients that it would be interesting to see if the warning would lead to shifts in choice by Chinese companies.
“If indeed these proclamations forecast a future shift, we see potential revenue risk for a variety of chipmakers,” analysts wrote.
“In particular, with Qualcomm, we would note the availability of a competitive non-US technology (in Mediatek) could create near-term risk versus for instance with PC or server parts where alternative choices from AMD or Intel are less compelling.”
The warning comes after the US on Monday curbed exports to another 140 Chinese technology firms, including chip equipment maker Naura Technology Group.
“China's seemingly more rapid reaction to new US measures, versus what we had viewed as relatively muted responses by China since the US began targeting China and restricting access to Western technology during the first Trump administration, could signal further bifurcation between China and Western markets/tech moving forward,” analysts concluded.