China’s Delete A Policy Costs Intel Billions in Revenue
Beijing’s push to replace foreign chips is hitting American chipmakers where it hurts
China’s Ministry of Industry and Information Technology issued directives in early 2024 requiring the country’s largest telecom carriers — China Mobile, China Telecom, and China Unicom — to phase out foreign semiconductors from their network infrastructure by 2027. The policy, part of a broader “Delete A” (de-Americanization) campaign, is now showing measurable financial results.
Intel’s revenue from China declined from $20.03 billion in 2019 to $14.85 billion in 2023, according to the company’s annual filings. China was Intel’s largest market, representing 27% of total revenue in 2023. AMD saw its China revenue drop from $5.21 billion in 2022 to $3.42 billion in 2023, with China’s share falling from 22% to 15% of total revenue.
How the replacement works
Official procurement guidelines for government agencies and state-owned enterprises now list eight CPU options for laptops and desktops. The top six are domestic Chinese CPUs — including chips from Huawei’s HiSilicon, Zhaoxin, and Phytium Technologies. Intel and AMD occupy the bottom two slots, effectively making them last-resort options.
The telecom directive is more aggressive. Network equipment must transition to domestic alternatives within a defined timeline, with quarterly progress reports required by MIIT. Industry analysts estimate that by the end of 2026, roughly 40% of China’s telecom network infrastructure will run on domestic chips.
The broader “Delete A” ecosystem
The chip replacement extends beyond semiconductors to operating systems, databases, and enterprise software. Chinese government agencies are migrating from Windows to domestic Linux distributions (UOS, Kylin), from Oracle databases to DM Database and OceanBase, and from VMware to domestic virtualization platforms.
A senior executive at a Beijing-based systems integrator, speaking on condition of anonymity, told us in May 2026: “The pace has accelerated since the start of the year. Projects that were planned for 2028 are being pulled forward to 2026-2027.”
What it means for chip investors
The revenue losses for Intel and AMD are structural, not cyclical. China’s domestic chip ecosystem — while still behind in cutting-edge processes — has reached sufficient maturity for most enterprise and infrastructure applications. The 28nm and 14nm nodes, which cover the vast majority of telecom and government computing needs, are now produced at scale by SMIC and Hua Hong Semiconductor.
For investors, the implication is clear: companies with heavy China revenue exposure face a secular headwind. Meanwhile, Chinese chip firms benefit from a captive domestic market that grows more protected each year.
Sources
- China US Focus, “PRC Industrial Policy in the U.S.-China Semiconductor Chip Competition”
- Intel and AMD annual reports (2019-2023)
- WSJ, “China Telecom, Intel, AMD Chips” reporting
- SEMI, World Fab Forecast Q1 2026
