By Che Pan and Brenda Goh

BEIJING/SHANGHAI, March 4 (Reuters) - China plans to issue guidance to encourage the use of open-source RISC-V chips nationwide for the first time, two sources briefed on the matter said, as Beijing accelerates efforts to curb the country's dependence on Western-owned technology.

The policy guidance on boosting the use of RISC-V chips could be released as soon as this month, although the final date could change, the sources said.

It is being drafted jointly by eight government bodies, including the Cyberspace Administration of China, China's Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the China National Intellectual Property Administration, they added.

The sources declined to be named as the policy discussions were still under way. The four ministries did not respond to requests for comment.

RISC-V is a open-source technology that is used to design a range of less-sophisticated chips, from those in smartphones to CPUs for artificial intelligence servers.

It competes globally with proprietary and more commonly used chip architecture technology including x86, dominated by U.S. firms Intel INTC.O and Advanced Micro Devices AMD.O, and Arm, developed by SoftBank Group-owned Arm Holdings 9984.T.

In China, state entities and research institutes have eagerly embraced RISC-V in recent years, seeing it as geopolitically neutral. Chinese chip designers are attracted by its lower costs, but the government has yet to mention it in policy.

Its widening use in the country has been greeted warily in the United States, as friction between Washington and Beijing grow - especially over technology.

In 2023, Reuters reported that some U.S. lawmakers were putting pressure on the Biden administration to restrict American companies from working on the technology over concerns that Beijing was exploiting its open-source nature to advance its own semiconductor industry.

China's largest for-profit RISC-V intellectual property providers include Alibaba's 9988.HK XuanTie and startup Nuclei System Technology, which sell commercial RISC-V processors to chip designers.

Industry executives at a event focused on RISC-V that was organised by XuanTie last week said the popularity of DeepSeek could also boost adoption of RISC-V, as the Chinese AI startup's models run efficiently on less-powerful chips.

Smaller companies that want to use AI and DeepSeek could turn to chips designed with RISC-V's architecture, said Sun Haitao, a manager at China Mobile System Integration, an ICT equipment provider during the event.

"Even if a RISC-V solution priced at 10 million yuan might only reach about 30% of the level of NVIDIA or Huawei, buying three sets means the overall cost might still be lower," he said. "I think this is a breakthrough point."

(Reporting by Che Pan. Editing by Gerry Doyle)

((Che.Pan@thomsonreuters.com;))