Beijing. Intel products sold in China should undergo a security review, the China Cybersecurity Association (CSAC) said on Wednesday, arguing that the American chipmaker has “consistently harmed” the country’s security and national interests.
Although the CSAC is an industrial group and not a government body, it maintains close ties with the Chinese state and the series of accusations against Intel, set out in a long post on its official WeChat account, could trigger a security review by the powerful regulator Cyberspace Administration of China (CAC).
Intel and the CAC did not immediately respond to a request for comment. The company’s shares began with a drop of 2.7 percent in trading prior to the opening of the US session. At the end of the session, they reduced their losses, falling 1.54 percent to $22.31 per share, amid a broad wave of selling in the technology sector following a disappointing update from chip equipment maker ASML.
“It is recommended that a review of the network security of products that Intel sells in China be initiated, in order to effectively safeguard China’s national security and the legitimate rights and interests of Chinese consumers,” the CSAC said.
Last year, the CSAC banned national operators of key infrastructure from purchasing products made by US memory chip maker Micron Technology Inc after finding that the company’s products had failed its network security review.
A similar security review of Intel products could negatively impact the company’s revenue, more than a quarter of which came from China last year.
Backdoor accusations
The accusations come as China is facing a U.S.-led effort to restrict its access to equipment and components crucial for chip manufacturing, in what Washington calls an attempt to halt the modernization of the Chinese military. .
“Relations between the United States and China are fragile, and the more talk of trade restrictions and tariffs, the more likely the other side will retaliate,” said Dan Coatsworth, investment analyst at AJ Bell.
In its publication, CSAC accuses Intel chips, including the Xeon processors used for artificial intelligence tasks, of carrying several vulnerabilities, concluding that Intel “has significant defects when it comes to product quality, security, which indicates that their attitude towards customers is extremely irresponsible.”
The industry group continues to claim that the operating systems built into all Intel processors are vulnerable to backdoors created by the US National Security Agency (NSA).
“This poses a major threat to the security of critical information infrastructures of countries around the world, including China (…) the use of Intel products poses a serious risk to national security,” the CSAC said.
A ban, even temporary, on Intel products could further tighten the supply of AI chips in the Chinese market, which has struggled to find viable alternatives to Nvidia’s cutting-edge products, which dominate globally but whose export to China is now prohibited.
Intel won orders for its Xeon processors this year from several state-linked Chinese agencies for use in AI work, according to a Reuters study of public tenders. (With information from to redification)
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