Microsoft, Amazon, and Google are speeding up the transfer of their server and product production lines from China to overseas, while Nvidia’s sales in the high-end AI chip market in China have nearly dropped to zero. Industry insiders say that Chinese companies can no longer take the lead in the global tech manufacturing sector, signaling an irreversible divergence in the tech supply chains between China and the US.
According to recent reports from media outlets such as Nikkei Asia and Reuters, Microsoft has requested its major suppliers to establish Surface laptop and server production lines outside of China, with the transfer expected to be completed by 2026. Amazon Web Services (AWS) is promoting the overseas production of AI server components and reassessing its collaboration with Chinese PCB suppliers. Meanwhile, Google is urging its partners to expand server assembly capacity in Thailand and Vietnam.
A senior executive at a Taiwanese electronics manufacturing plant involved in the supply chain transfer stated: “Customers are now demanding higher levels of risk diversification than before. All major projects now require a secondary production base to ensure swift relocation in case of policy changes.”
An engineer at Huawei, who goes by the pseudonym Li Jun, revealed to Dajiyuan that the company has launched server and AI chip manufacturing lines in multiple provinces in the past two years, with financial and tax support provided by local governments. He said, “We have been asked to quickly fill the production gap left by foreign investments withdrawing. In the past month, the company has been holding meetings almost every day, discussing the need to establish an alternative supply chain as part of an external strategy.”
The source pointed out that the projects involve motherboard manufacturing, packaging, testing, and assembly processes, describing it as “setting up an entirely new supply chain”. He mentioned that both central and local governments are offering low-interest financing and research subsidies with the goal of establishing an independent local computing power system within three years, aiming to complete it by the end of 2028.
According to reports from state-owned media, several Chinese chip companies have accelerated their research and development efforts in recent years. Enterprises such as Huawei HiSilicon, Cambricon, Bitmain, and Suiyuan have introduced a new generation of AI training and inference chips. Industry analyst Wu Wei from Beijing stated that some domestic products’ efficiency is nearing that of Nvidia’s A100, but they still lag behind in materials and technical details compared to foreign counterparts.
He remarked, “Now, the strategy of overtaking on curves is no longer viable; one can only go over the mountains. In fact, they have long known this theory, seeking shortcuts. Look, blinded by it, the technology is approaching the A100, but the materials are lacking, and the yield is low.”
Due to China’s lagging high-tech capabilities, the Chinese Communist Party advocates “overtaking on curves”, such as calling on foreign investments to exchange technology for market access and substituting Western advanced fabrication process chips with “small chips” (Chiplets), attempting to break through the US and Western countries’ control and containment measures, but with limited success.
Professor Ji Guang from the Information Science and Technology School at Peking University told reporters that Nvidia’s contraction in China, coinciding with US policies, indicates the gradual manifestation of the strategic effects of export controls.
Nvidia CEO Huang Renxun recently stated during a financial briefing that the company’s sales in the high-end AI accelerator market in China are “almost zero” and that China is no longer considered a primary source of revenue in financial forecasts.
Shen Zhongyang, an industrial economist in Shanghai, remarked in an interview that this adjustment in China’s tech industry supply chain is the “deepest in thirty years”, reflecting a natural shift under geopolitical tensions and indicating a comprehensive restructuring in global manufacturing layouts.
The head of an information equipment manufacturer in Guangzhou told Dajiyuan that some customers are requesting production of complete machines in Thailand or Vietnam but still using Chinese-made motherboards and power modules. He stated, “Recently, my colleagues have informed me that foreign customers are making numerous requests due to the inability to fully replace the Chinese upstream supply chain in the short term.”
As of 2025, the AI chip market in China has seen the emergence of several enterprises competing simultaneously, with leading products including Ascend 910B, Cambricon MLU370, and Bitmain BR104. Observers in the industry note that with the withdrawal of foreign supply chains and local substitution moving forward, the global tech manufacturing industry is entering a phase of deep restructuring.
Multiple sources indicate that mainland China is facing multiple pressures, including the reorganization of foreign tech supply chains and limitations on high-end computing power. It is widely believed that the recent actions of Microsoft, Amazon, and Google to shift operations overseas are related to geopolitical tensions.
An anonymous scholar from the southwest region disclosed that in response to Western technological constraints, China will ramp up investments in semiconductor design and manufacturing equipment in the short term, with local governments and state-owned enterprises possibly leading a new round of capacity expansion.
He noted, “Looking toward the medium term, although local substitution is politically supported, it is still constrained in terms of high-end processes and software ecosystems. Long-term trends indicate that the divergence in the Sino-US tech chain is irreversible.”
Since 2022, the US has repeatedly tightened restrictions on semiconductor exports to China, limiting the export of high-performance GPUs and AI acceleration chips. Nvidia has successively launched special versions like A800 and H800 to comply with regulations, but was limited again by the end of 2024.