The intel building. (Wikimedia Commons)
A Chinese agency backed by the country’s internet overseer is pushing for an investigation into Intel Corp. products sold domestically, warning of security flaws and high failure rates.
The Cyber Security Association of China, a little-known entity backed by the powerful Cyberspace Administration of China, called in a public WeChat post for an investigation to protect consumers. It accused Intel of allowing built-in backdoors in chips for years, compromising user safety.
It’s unclear whether the CAC, which polices the country’s internet industry and data management regimes, has endorsed the association’s position. The low-profile grouping of internet companies and researchers was founded in 2016 and focuses on training and relationship-building within the industry. “Intel products pose serious risks to national security,” the association said in its social media post.
Beijing has waged a campaign for years to reduce a reliance on foreign technology as US tensions ratcheted higher, urging enterprises to choose local alternatives. That effort has accelerated as Washington increasingly seeks to cut off the flow of valuable Western technology and components to the country and its biggest tech players, including Huawei Technologies Co.
Just this week, key US lawmakers pressed the Biden administration to block Huawei suppliers from buying American chipmaking gear, escalating efforts to prevent the sanctioned Chinese telecom giant from making progress on semiconductor manufacturing.
In response, Beijing has targeted select American names, including Micron Technology Inc. The Chinese government in 2023 barred Micron’s chips from critical infrastructure over cybersecurity concerns, though the US company has since moved to repair ties.
Still, calls targeting Intel have been rare given its dominance of the PC processor market and longstanding presence in China.
In recent years, its clout has diminished as rivals such as Nvidia Corp. and Advanced Micro Devices Inc. gained market share in the post-PC era. Chinese state-backed rival Loongson Technology Corp. has made inroads particularly in the lucrative government procurement market against foreign brands.
But Intel, despite the erosion of its dominance, still relies heavily on the PC market and, as recently as the first quarter of this year, accounted for 70% of total revenue from processors that go into laptops and desktop machines, according to IDC. China remains the biggest market for PCs and is still heavily reliant on imported technology despite efforts to establish domestic supply. The country yields roughly a quarter of its revenue.
Intel’s shares fell further this week after ASML Holding NV cut its sales outlook, part of a global rout for the chip sector. In a statement Wednesday, the US chipmaker said it goes to “great lengths to protect our customers.”
“Security has long been a top priority for Intel,” the company said. “We look forward to working with the relevant officials on this matter to clarify any questions that may exist and demonstrate Intel’s deep commitment to the safety and security of our products.”
Chinese government-linked bodies have long pushed employees to ditch foreign brands such as iPhones. In 2022, Beijing ordered central government agencies and state-backed corporations to replace foreign-branded personal computers with domestic alternatives within two years, one of the most aggressive efforts to eradicate key overseas technology.
With assistance from Jessica Sui and Ian King.
