Local tech dominates in China Telecom's $2B server procurement

Domestic companies dominate China Telecom's $2 billion server procurement shortlist, although most are based on ARM or AMD architectures.

Robert Clark, Contributing Editor

October 22, 2024

2 Min Read
China Telecom logo sign
(Source: Cynthia Lee/Alamy Stock Photo)

Two-thirds of China Telecom's new server tender, worth more than $2 billion, is set to go to local companies. The telco has just issued the shortlist for a nationwide tender for 156,000 servers, worth approximately 16.8 billion Chinese yuan (US$2.1 billion).

The heavy tilt in favor of domestic technologies is just the latest sign of China's determination to eliminate foreign hardware suppliers from its networks.

In the case of China Telecom, the locally-produced portion of its annual server tender has risen from 20% in 2020 to nearly 50% last year and 67.5% this year, China industry website C114.com has calculated.

The latest procurement has a complex structure, more likely the result of national industry development requirements than the operator's own needs. 

The project is broken into 12 different packages, each calling for a different solution, ranging from 100 'balancing servers' to 63,100 ARM servers.

The companies most nominated to the shortlist are Huawei spinoff xFusion and Huawei partner Kunlun Technology – each shortlisted six times – while Inspur is nominated five times and ZTE, H3C, and FiberHome four times each.

ARM architecture

But while Chinese hardware and systems are prioritized, around half will be built on ARM architecture and another 9% on China's AMD-based C86 architecture. China Telecom is also calling for dedicated solutions based on the homegrown Loongson, Yongfeng and Shenwei architectures, C114 reported.

The tender documents do not specify the purpose of the new kit, although AI computing, cloud and 5G feature heavily in its technology priorities.

China Telecom’s first-half capital expenditure totalled RMB47.1 billion ($6.61 billion) and it has said it will maintain spending at below 20% of revenue.

Last week a China tech trade body, linked to the MIIT, called for a security review of Intel, accusing it of repeated security flaws in its chips and of covertly installing backdoor vulnerabilities.

In March the MIIT was reported to have directed operators to ensure their networks were free of Intel and AMD chips by 2027.

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About the Author

Robert Clark

Contributing Editor, Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. 

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