Chinese Agency Urges Investigation into Intel's Security Concerns

TMTPOST -- A Chinese agency with ties to the country’s internet regulator is pushing for an investigation into Intel's products sold in China, citing concerns over security vulnerabilities and frequent failures.

The Cyber Security Association of China, a relatively obscure organization backed by the Cyberspace Administration of China, called in a public WeChat post for an inquiry to safeguard consumers. The association accused Intel of embedding backdoors in its chips for years, compromising user security.

The association, established in 2016, is a low-profile group of internet companies and researchers focusing on training and fostering relationships within the industry. In its post, the association warned, "Intel products pose serious risks to national security."

Intel's global annual revenue exceeds $50 billion, with nearly a quarter coming from the Chinese market. Previously, the U.S. government passed the so-called "CHIPS and Science Act," which unjustly excluded and suppressed China's semiconductor industry, and Intel has been one of the biggest beneficiaries of this legislation.

To please the U.S. government, Intel has actively positioned itself against China on the so-called Xinjiang issue, pressuring its suppliers not to use labor, products, or services from the Xinjiang region. In its financial reports, Intel even listed Taiwan region alongside Chinese mainland, the U.S., and Singapore, and it voluntarily cut off supplies and services to Chinese companies like Huawei and ZTE.

For years, the Chinese government has campaigned to reduce its reliance on foreign technology as tensions with the U.S. escalated, encouraging businesses to adopt local alternatives. This effort has gained momentum as Washington increasingly seeks to block China’s access to key Western technologies and components, particularly those used by major tech companies like Huawei Technologies.

This week, U.S. lawmakers urged the Biden administration to further restrict Huawei suppliers from accessing American chipmaking equipment, heightening efforts to curb the Chinese telecom giant's semiconductor advancements.

In response, Beijing has taken aim at select American companies, including Micron Technology Inc., which was barred in 2023 from providing chips for critical infrastructure over cybersecurity concerns. Micron has since sought to rebuild its relationship with China.

Intel, however, has rarely been targeted, given its dominance in the PC processor market and its longstanding presence in China. Despite its influence diminishing in recent years, as competitors like Nvidia and Advanced Micro Devices Inc. gained ground, Intel remains a key player. Its Chinese state-backed rival, Loongson Technology, has made strides, particularly in government procurement, but Intel still holds 70% of the global PC processor market, according to IDC.

China, the largest market for PCs, continues to depend heavily on imported technology despite efforts to bolster domestic supply chains, with Intel deriving about a quarter of its revenue from the country.

This week, Intel's stock dropped further after ASML cut its sales forecast, leading to a broader slump in the chip sector.

In a statement, Intel reiterated its commitment to security, saying, “Security has long been a top priority for Intel. We look forward to working with the relevant officials to address any concerns and demonstrate our deep commitment to product safety and security.”

For years, Chinese government-linked entities have been pushing employees to abandon foreign brands like iPhones. In 2022, Beijing ordered central government agencies and state-backed corporations to replace foreign-branded computers with domestic alternatives within two years, marking one of the most aggressive efforts to eliminate key foreign technologies from critical sectors.