Janice R. Andrews
Chinese telecom businesses are buying more servers with CPUs from Huawei, Hygon, or Loongson as they progressively move toward indigenous CPU platforms. The move by telecom behemoths including China Telecom, China Mobile, and China Unicom is said to be in line with the nation’s drive for self-sufficiency and to greatly assist the development of processors built in China, according to the state-run Global Times. But there are also significant difficulties and complexities associated with this shift.
Increase in Domestic CPU Usage
156,000 servers are planned by China Telecom, of which 67.5% will be ‘G-series’ servers with CPUs built in China. This is a significant change from four years ago, when Intel Xeon processors dominated with a 79.4% share of the company’s servers, and only 19.9% of them used domestic CPUs. A new age in Chinese telecom is marked by the ‘G-series’ servers, which highlight the strategic significance of locally developed CPUs.
Additionally, China Mobile is strengthening its backing for regional processors. Ten of the company’s thirteen server procurement tenders are for ‘G-series’ projects, demonstrating their dedication to using indigenous CPUs. A notable change in procurement strategy can be seen in the percentage of Chinese CPUs in China Mobile’s PC server buys, which increased from roughly 21% in 2020 to 43.5% lately.
Similar trends have been observed by China Unicom, which has seen a noticeable increase in the need for indigenous processors since 2020. The company has been using more and more CPUs built in China, specifically Kunpeng 920 from Huawei and the Hygon 7165 and 7185 from Sugon. This pattern emphasizes the industry’s general shift toward in-house technological solutions.
The Effects of American Export Limitations
This shift has been made possible in large part by the stringent export regulations enforced by the US government for the sale of high-performance CPUs to Chinese companies. The potential of harsher penalties has prompted Chinese telecom businesses to make sure they don’t go without the compute performance they require, even if these limits now have little effect on telco titans (apart from Huawei).
Telco behemoths are building infrastructure that is unaffected by the instruction set architecture (ISA) of the CPUs that power it, in addition to managing export limitations. In its most recent procurement round, China Telecom bought a range of processors, including x86 CPUs and native CPU architectures including Arm, C86, LoongArch, Yongfeng, and SW.
The Problem: Reliance on International Technologies
The fundamental technology of many Chinese-made processors are still connected to foreign advances, despite the apparent shift towards domestic CPUs:
- Huawei’s Kunpeng CPUs: Originally created in the United States and the United Kingdom, these chips are based on a modified Arm ISA.
- Sugon’s C86: Made by GlobalFoundries, this architecture is based on AMD’s x86 Zen, with modifications for the Chinese market.
Loongson’s LoongArch: Although purportedly a unique architecture, it is primarily based on the MIPS ISA. - Yongfeng, produced by Zhaoxin: An x86 microarchitecture that might be created by an American Via Technologies affiliate.
Sunway’s SW ISA : Derived from DEC’s Alpha, a 1990s-era product.
Enhancements to Performance In the Face of Foreign Dominance
Even while Chinese-made CPUs continue to use foreign technologies, their efficiency has been rising over time. Significant improvements have been made possible by advances in manufacturing techniques and engineering breakthroughs. For example, Huawei’s comeback in China’s smartphone industry has been largely attributed to SMIC’s second-generation 7nm process technology.
According to Chen Jing, vice president of the Technology and Strategy Research Institute, “Chinese-made CPU chips have seen big improvements in performance and cost-effectiveness, which meet the needs of telecom operators,” as reported by Global Times.
Foreign Businesses Continue to Compete
Foreign firms like AMD, Intel, and Nvidia continue to compete for procurement contracts despite the trend towards indigenous CPUs—as long as their processors comply with U.S. export laws. For example, Nvidia stands to make $12 billion from the sale of its H100 processors that have been downsized and rebranded as HGX H20s.
Wider Economic Framework
Chinese Vice Premier He Lifeng underlined the significance of drawing in and making use of foreign investment while permitting foreign innovations to enter the Chinese market in a larger economic framework. He advocated for easing market access to high-tech regulations in order to make it easier for international investors to enter China.
These prohibitions are enforced by the U.S. government, which cites national security concerns and the possibility that China could weaponize cutting-edge technologies. This complicates the geopolitical situation even more and raises questions about China’s possible backing for Russia in the crisis in Ukraine.
Using local CPU platforms, China’s telecom companies are moving closer to being self-sufficient. The necessity to get around U.S. export limitations, performance enhancements in CPUs built in China, and national policy all contribute to this shift. To truly achieve technical independence is a tough task, as evidenced by the continued reliance on foreign technologies.
