Intel products sold in China have been recommended for a security review by a local trade association, which claims that the U.S. chipmaker presents “serious risks” to national security. In a recent statement, the Cybersecurity Association of China (CSAC) highlighted alleged vulnerabilities in Intel’s CPU chips, asserting that issues in product quality and security management indicate an “irresponsible attitude toward its customers,” as per a translation from Google.
CSAC accused Intel of utilizing remote management features to monitor users clandestinely, installing backdoors, and neglecting to address defects flagged by users.
Daniel Newman, CEO of The Futurum Group, observed that this security review arises amid escalating tensions between China and the U.S. concerning chip controls and AI leadership. Newman commented on the timing, suggesting it is likely strategic, as Intel grapples with several market challenges, including China’s pressure on its substantial revenue and market share in the region.
In 2023, China contributed to 27.4% of Intel’s revenue, marking it as crucial for the company, especially as it faces difficulties with poor earnings and job reductions affecting its stock performance. Nonetheless, U.S. chip policy has restricted Intel from exporting certain advanced products to Chinese clients and, in some cases, prohibited shipments altogether.
In its statement, CSAC mentioned Intel as a significant benefactor of the Biden administration’s Chips and Science Act, which they believe has unfairly excluded and restrained China’s semiconductor industry. CSAC also criticized Intel for obliging its suppliers not to use any labor or products from China’s Xinjiang region. U.S. law prohibits imports from this region under the presumption of forced labor production.
Intel had previously warned that export restrictions on China could negatively impact its sales. In response to U.S. restrictions and to enhance chip self-sufficiency, China has reportedly been instructing major telecommunications carriers to stop using foreign chips from companies like Intel.
Futurum’s Newman suggested that Beijing is likely employing a strategy similar to the one used against American chip giant Micron last year, which had a significant economic impact on the semiconductor market. Last year, China banned companies labeled as “critical information infrastructure” from purchasing Micron products. An investigation by the Cyberspace Administration of China concluded Micron products posed “network security issues” and threats to national security.
In a WeChat post, Intel acknowledged the CSAC report, stating that the company prioritizes product safety and quality. Intel expressed its intent to communicate with relevant authorities to address concerns and affirm its strong commitment to safety and quality.
