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Business News/ News / World/  Dell Inc to reduce dependence on Chinese chips amid China, US rivalry: Report
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Dell has announced that it seeks to reduce its reliance on chips made in China, including those made by foreign firms. The company said it will stop using Chinese-made chips by 2024.

The company has told suppliers to reduce the amount of other made-in-China components in its products amid concerns over US-China tensions. (Reuters)Premium
The company has told suppliers to reduce the amount of other made-in-China components in its products amid concerns over US-China tensions. (Reuters)

US computer maker Dell Inc has decided to reduce its dependence on Chinese chips due to the increased rivalry between the two countries. This comes as a setback for China in the chip-technology sector, wrote Valerio Fabbri for Geopolitica.info.

Dell has announced that it seeks to reduce its reliance on chips made in China, including those made by foreign firms. The company said it will stop using Chinese-made chips by 2024.

The company has told suppliers to reduce the amount of other made-in-China components in its products amid concerns over US-China tensions.

According to Fabbri, the development comes as a setback for China when several cities are making attempts to promote the development of high-end and intelligent manufacturing.

It is also a signal of the growing rivalry between the US and China on semiconductors. The US sees China's use of technological know-how as a threat to its national security, wrote Fabbri for Geopolitica.info.

Dell in 2022 told suppliers that it aims to lower the amount of Chinese-made chips it uses including those produced at facilities owned by non-Chinese chipmakers.

The company has also asked suppliers of other components, such as electronic modules and print circuit boards, and product assemblers to help prepare capacity in countries beyond China, such as Vietnam, writes Fabbri for Geopolitica.info.

Indo-Pacific Centre for Strategic Communications (IPCSC) recently reported that China finds it difficult to acquire microchips amidst the US-imposed barriers.

The report also states that due to the restrictions, "China is finding it tough to train artificial intelligence systems and power advanced applications in the military and surveillance fields".

The US administration in October put a set of export controls on China which included measures that stop Beijing from acquiring from anywhere in the world, semiconductor chips with US equipment.

Since then, even Europe and its allies have been working towards ensuring that Beijing doesn't procure high-end microchips from anywhere in the world.

As a result, Chinese firm, Si Microelectronics was in November blocked by Germany from taking over chip-making factory Elmos. The country also blocked Chinese investment in the Bavaria-based ERS Electronic.

The UK government in the same month barred Chinese firm Wingtech from taking over the country's largest microchip factory Nexperia.

"In 2021, South Korea supplied around $76.8 billion, or 60 per cent of its total microchips exported to China. But one year after its usual semiconductor business with Beijing, Seoul, according to South China Morning Post, is under pressure to side with the US-led alliance in stopping China from getting high-quality chips. However, South Korean semiconductor manufacturers Samsung and SK Hynix which have factories in China have been granted a year-long exception from US export restrictions," reported IPCSC. 

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Published: 15 Jan 2023, 10:55 PM IST
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