Key facts
- Chinese authorities are examining Broadcom's hardware use in state-backed data centers.
- The State-owned Assets Supervision and Administration Commission (SASAC) is leading the survey.
- Broadcom switches may account for up to 90% of equipment in use in these data centers.
- SASAC may issue guidance to reduce the use of Broadcom switches.
- Nvidia products are already barred from state-backed data centers.
Chinese authorities are scrutinizing the deployment of Broadcom's hardware in state-backed data centers as part of a broader initiative to enhance domestic technological capabilities and supply chain resilience, according to a Financial Times report citing individuals familiar with the matter. The State-owned Assets Supervision and Administration Commission (SASAC), which oversees state-owned enterprises, has reportedly spent recent weeks surveying the extent to which Broadcom's switches are used across these facilities.
The survey's preliminary findings suggest that Broadcom switches could constitute as much as 90% of the equipment currently in operation. Based on these findings, SASAC may issue informal directives to state-run data centers, encouraging them to decrease their reliance on Broadcom switches. This move aligns with Beijing's "domestic chips for domestic use" campaign, aimed at increasing the adoption of Chinese-made semiconductors and AI technology within the public sector.
While Nvidia's products have already been prohibited from state-backed data centers, Broadcom's switches remain prevalent. Both Broadcom and Nvidia, alongside China's Huawei, supply high-end switches within the country. Reuters could not immediately verify the report, and Broadcom and SASAC were unavailable for comment outside of regular business hours.