Following the footsteps of PC makers such as Dell and HP, which reportedly aim to reduce the number of components made in China as quickly as possible, a report by technowvoice suggests that American networking giant Cisco is also joining the ranks, as it has now prohibited suppliers from providing products with Chinese origins.

According to technowvoice, Cisco has notified its suppliers of stricter requirements for certifying chip origin (COO – Certification of Original). Furthermore, the standard has been elevated from verifying the chip’s final packaging location to tracing the origins of both the chip itself and its photomasks, ensuring they are not manufactured in China, as noted by technowvoice.

“China Decoupling” Wave Continues to Expand

Ahead of the potential tariff hikes in Trump’s second term, CSP giant Microsoft, as well as PC companies HP and Dell, have already taken action. As noted by a previous report from Nikkei, Microsoft is said to urge suppliers to manufacture components outside of China and to expedite the relocation of Xbox assembly lines out of the country. Additionally, Microsoft has requested suppliers to produce Surface laptops outside of China by the end of next year.

On the other hand, HP and Dell are reportedly reviewing their 2025 procurement plans to accelerate the reduction of China-based production for laptops and desktops. Technowvoice further notes that Dell has initiated plans to “de-Sinicize” the origin of chips in products sold in the U.S., and it would like to ensure by 2026, all internal chips in its PCs, notebooks, servers, and peripheral devices will be free of Chinese manufacturing.

Micron to Benefit Most in the Memory Sector

The move by Cisco, in some way, suggests that the “China decoupling” wave has been expanded from components in PCs and servers to chips used in various end-products, including networking hardware. Moreover, it may mark an era when companies would be compelled to avoid sourcing mature process chips from China entirely.

According to the technowvoice report, in such a scenario, Taiwanese semiconductor and memory manufacturers stand to benefit significantly as the global demand for non-China mature process capacity intensifies, presenting a potential turning point for these industries. Meanwhile, the aggressive price-cutting in the market, driven by the capacity expansion in China, could also be alleviated.

Notably, if U.S. market-bound electronic products have to be decoupling from China in the chips they use, technowvoice suggests that U.S.-based Micron Technology is poised to benefit the most in the memory chip sector, followed by Taiwan’s Nanya Technology and Winbond Electronics, which supply significant volumes of mature-process specialty memory chips for consumer electronics and networking equipment.

While against the backdrop of chip “de-Sinicization,” Taiwan’s foundries, including UMC, TSMC subsidiary Vanguard International Semiconductor, and Powerchip Semiconductor Manufacturing Corp, may also benefit, as they are all specialized in mature nodes, according to the report.

It is worth noting that in early 2024, Intel and UMC announced that they will collaborate on the development of a 12nm semiconductor process platform to address high-growth markets such as mobile, communication infrastructure and networking, according to Intel’s press release.

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(Photo credit: Cisco)