The Cybersecurity Association of China (CSAC) has called for a security review of Intel products sold in China, citing concerns about national security and interests. While CSAC is not a government body, it has close ties to the Chinese state and its allegations against Intel could prompt a review from China’s cyberspace regulator, the Cyberspace Administration of China (CAC). Intel and the CAC have not yet responded to the allegations, but the company’s shares closed lower on Wednesday amidst a broader tech sell-off.
CSAC has recommended a network security review of Intel products in China to safeguard national security and the rights of Chinese consumers. This is in response to a similar move by CAC last year, which barred domestic operators from buying products made by US memory chipmaker Micron Technology Inc after failing a network security review. A review of Intel products in China could potentially impact the company’s revenues, as over a quarter of its revenue came from China last year.
These allegations come at a time when China is facing restrictions on access to crucial chipmaking equipment and components from the US, with Washington citing concerns about China’s military modernization. The fragile relationship between the US and China, coupled with talks of restrictions on trade and tariffs, could lead to retaliation from either side. CSAC accuses Intel chips, including Xeon processors used for artificial intelligence tasks, of carrying vulnerabilities and major defects in product quality and security management.
CSAC further alleges that the operating systems embedded in all Intel processors are vulnerable to backdoors created by the US National Security Agency (NSA), posing a significant security threat to critical information infrastructures globally, including in China. A ban on Intel products, even if temporary, could tighten the supply of AI chips in China, which has struggled to find alternatives to Nvidia products due to export bans. Intel has secured orders for its Xeon processors from several Chinese state-linked agencies this year for use in AI work.
Overall, the accusations against Intel products in China highlight growing concerns about security vulnerabilities and potential threats to national security. The call for a security review could impact Intel’s revenue in China and further strain the already fragile relationship between the US and China. The outcome of this situation remains uncertain, but it underscores the challenges faced by global tech companies operating in a complex geopolitical landscape.
