China surveys Broadcom switch use in state data centers

Chinese authorities are surveying the use of Broadcom ↘ 2.62% networking switches across state-backed data centers, a move that could accelerate Beijing's push to replace foreign technology with domestic alternatives in critical infrastructure.

The State-owned Assets Supervision and Administration Commission (SASAC), which oversees China's state-owned enterprises, has spent recent weeks cataloging how extensively Broadcom switches are deployed in state-controlled facilities, according to a Financial Times report published Wednesday citing people familiar with the matter. Preliminary findings suggest Broadcom hardware may account for as much as 90% of switches at some state-owned companies.tradingview+2

Broadcom shares dipped in premarket trading on Wednesday following the report, after five consecutive sessions of gains that had lifted the stock roughly 8%.tradingview

Beijing's Self-Sufficiency Drive

The survey is part of Beijing's broader "domestic chips for domestic use" campaign, which aims to expand adoption of Chinese-made semiconductors and AI technology across the public sector. Based on the preliminary findings, SASAC may issue informal guidance directing state-run data centers to scale back their use of Broadcom switches, the Financial Times reported.reuters+1

China has sharpened its focus on technological self-sufficiency and supply-chain resilience amid ongoing trade and technology tensions with the United States, Reuters reported, noting that Beijing has provided particular support for smaller specialized companies it calls "little giants".reuters

SASAC is also examining whether Broadcom leveraged its market position to bundle products or require customers to make large purchases of switch chips, according to the Financial Times report.tradingview

Domestic Suppliers Stand to Gain

Broadcom, Nvidia ↘ 1.47%, and Huawei all sell high-end data center switches in China. While Nvidia products have already been restricted from state-backed facilities, Broadcom's switches have remained widely deployed. A potential reduction in Broadcom's presence could benefit Chinese suppliers including Huawei, H3C Technologies, and Ruijie Networks.investing+2

Huawei has made progress improving its networking capabilities, though industry experts told the Financial Times that its switches remain less energy efficient than Broadcom's.tradingview

Reuters reported it could not immediately verify the Financial Times account, and that Broadcom and SASAC could not be reached for comment outside regular business hours.reuters