State-owned Assets Supervision and Administration Commission Investigates Use of Broadcom Switches in State-owned Enterprises
Chinese authorities are reviewing the use of Broadcom hardware by state-owned data centers to support domestic manufacturers and reduce reliance on foreign AI infrastructure. The State-owned Assets Supervision and Administration Commission (SASAC) has recently investigated the use of Broadcom switches in state-controlled data centers, according to two informed sources. The sources indicated that the penetration rate of Broadcom switches in state-owned enterprises could be as high as 90%, and preliminary findings may lead SASAC to issue informal guidance to reduce the use of Broadcom switches in domestic data centers. State-owned data centers have been banned from using NVIDIA products but continue to use Broadcom switches in large quantities. SASAC is also investigating whether Broadcom is leveraging its market-leading position to bundle other products or requiring one-time purchases of up to tens of thousands of switch chips. These practices limit orders from Chinese companies like H3C and Ruijie Networks to other switch manufacturers like Huawei. H3C and Ruijie Networks are often included in procurement recommendation lists for government agencies, public institutions, and state-owned enterprises, which spend billions of dollars annually on information technology products.
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