China is set to throw down a new challenge to U.S. semiconductor chips makers such as Advanced Micro Devices (AMD) and NVDIA (NVDA) by ramping up support for its own production prowess.
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New Chinese Chips Policy
According to a report on Reuters, the Chinese government is getting ready to issue new guidance to “encourage” the use of open-source RISC-V chips nationwide for the first time. The move, which could come as soon as this month, will be made to reduce the country’s dependence on Western-owned technology. It comes only a matter of hours after President Trump confirmed a further $100 billion investment in the U.S. by chip giant Taiwan Semiconductor (TSM).
RISC-V is used to design a range of less-sophisticated chips, from those in smartphones to CPUs for artificial intelligence servers. As reported by Reuters it competes globally with proprietary and more commonly used chip architecture technology including x86, dominated by U.S. firms Intel (INTC), AMD and Arm Holdings (ARM). AMD shares were down slightly in pre-market trading, as were Intel and Nvidia.
Reuters reported that the policy is being drafted jointly by eight government bodies including the Cyberspace Administration of China, China’s Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the China National Intellectual Property Administration.
More Headaches for U.S. Tech
The move is likely to boost Chinese chip design firms and tech firms such as Alibaba (BABA) which is a for-profit RISC-V intellectual property provider.
It would mark a further blow to U.S. tech firms which were left reeling after the emergence of Chinese AI group DeepSeek earlier this year. It offers AI models with similar capabilities to those of its American rivals and at a lower cost. It is understood that DeepSeek could boost adoption of RISC-V because it runs on those less powerful chips. The move comes at a time of heightened tension between China and the U.S. as the two trade punches over tariffs and the battle for AI supremacy.
Is AMD a Good Stock to Buy Now?
On TipRanks, AMD has a Moderate Buy consensus based on 25 Buy, 11 Hold and 1 Sell rating. Its highest price target is $225. AMD stock’s consensus price target is $147.88 implying an 50.54% upside.
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