China surveys Broadcom switches in state-backed data centres

In short: China is checking how widely Broadcom’s data centre switches are used in state-backed facilities as it tries to rely more on domestic hardware.

What's going on

Chinese authorities have been surveying state-owned companies about their use of networking equipment made by Broadcom, a US company, according to the Financial Times. The survey is being run by Sasac, the government body that oversees many state-owned firms.

The focus is on “high-end switches.” A switch is a box that helps computers in a data centre pass information to each other (like a traffic controller that directs cars at a busy intersection). These devices matter for AI because training AI systems often means moving huge amounts of data quickly between many computers.

One person familiar with the survey said Broadcom switches may be used in as much as 90 percent of state-owned companies’ data centres. The survey could lead to informal guidance to reduce the use of Broadcom switches, as part of a “domestic chips for domestic use” push.

Sasac is also looking at whether Broadcom has used its strong market position to require very large purchases, or to bundle other products with switch sales. The report says this may have limited how easily Chinese suppliers like H3C Technologies and Ruijie Networks can buy from other switch makers, including Huawei.

What to watch

The report says any restrictions would mainly affect state-backed data centres, not private ones run by companies like ByteDance and Alibaba. It also suggests existing equipment would not be removed, but new buying choices could shift toward domestic brands. Industry experts told the FT that Huawei’s switches may use more electricity than Broadcom’s, which could raise operating costs.

Source: Financial Times