Intel merchandise bought in China have been beneficial for a safety overview by native officers who allege that the U.S. chipmaker poses “severe dangers” to nationwide safety.
In a assertion on Wednesday night, the Cybersecurity Association of China outlined alleged vulnerabilities in Intel’s CPU chips, claiming the issues in product high quality and safety administration present an “irresponsible perspective towards its prospects,” in response to a Google translation.
CSAC additional accused Intel of utilizing distant administration options to surveil customers whereas covertly putting in backdoors and of failing to handle defects reported by customers.
Daniel Newman, CEO of The Futurum Group, famous the safety overview comes amid elevated tensions between China and the U.S. in regard to chip controls and AI management.
“Given Intel’s current challenges, the timing is probably going nicely orchestrated as Intel is up in opposition to numerous market challenges and now has to take care of China placing strain on its vital income and market share within the area,” Newman mentioned.
China accounted for 27.4% of Intel’s income in 2023, making it important to the corporate’s backside line at a time its inventory is struggling following poor earnings and job cuts.
However, underneath U.S. chip coverage, the corporate has been restricted from exporting a few of its most superior merchandise to Chinese shoppers. It has additionally been barred from delivery to sure Chinese shoppers altogether.
In its assertion, CSAC famous that Intel has additionally been one of many largest beneficiaries of the Biden administration’s Chips and Science Act, which it says has unreasonably excluded and suppressed China’s semiconductor trade.
CSAC additionally took subject with the corporate requiring its suppliers to not use any labor or merchandise from China’s Xinjiang area. U.S. legislation bars imports from the area underneath the assumption that each one items produced there are the product of compelled labor.
Intel has beforehand warned that export restrictions on China may damage its gross sales.
As a part of strikes to counter U.S. restrictions and construct chip self-sufficiency, China has already reportedly been directing a few of its largest telecommunications carriers to stop use of overseas chips from corporations like Intel.
Beijing is probably going following a playbook much like the technique it used on American chip big Micron final 12 months — a sequence of actions that had a multibillion-dollar impression on the semiconductor market — mentioned Futurum’s Newman.
Last 12 months, corporations that had been deemed a part of China’s “crucial info infrastructure” had been banned from shopping for Micron merchandise.
An investigation carried out by the Cyberspace Administration of China concluded that Micron merchandise introduced “community safety points” and threats to nationwide safety.
Intel mentioned in a put up on its official WeChat account on Thursday that it had taken notice of the CSAC report and has all the time put product security and high quality first, in response to a Google translation.
“We will preserve communication with the related authorities to make clear related questions and reveal our robust dedication to product security and high quality,” it added.