Intel Corporation faces increased security reviews for its products in China after the China Cybersecurity Association (CSAC) announced on Wednesday that Intel’s products sold in China must undergo strict assessments. The CSAC accused Intel of continuously posing risks to China’s national security and interests.
In a public statement, the CSAC criticized Intel’s chips, including the widely used Xeon processors used for AI tasks, for containing numerous vulnerabilities. They condemned Intel for what it described as “significant defects” in product quality and security management, calling the company’s approach “irresponsible” toward its customers.
These claims emerged as China responded to U.S.-led efforts to restrict access to critical chip manufacturing equipment and components intended to hinder the modernization of the Chinese military.
The security reviews potentially threaten Intel’s bottom line, as more than a quarter of its revenue last year came from China. If sales are impacted, the company could have significant financial consequences.
In light of these developments, AJ Bell investment analyst Dan Coatsworth stated, “Relationships between the US and China are fragile, and the more talk about restrictions on trade and tariffs, the more likely the other side will retaliate in a tit-for-tat situation.”
In addition to China’s criticisms, international industry groups have raised concerns about vulnerabilities in Intel processors, explicitly suggesting that backdoors created by the U.S. National Security Agency (NSA) could exploit these chips.
The CSAC warned that using Intel’s products poses a severe risk to national security and threatens infrastructure, not just in China but globally.
As countries consider temporary bans on Intel products, this could further dampen AI chip supply in the Chinese market. The market is struggling to find viable alternatives to NVIDIA’s cutting-edge products, which are currently banned from export to China.
Despite these challenges, Intel continues to secure deals in China. According to a Reuters open bid investigation, Intel secured orders for Xeon processors to be used for AI tasks from several Chinese state-linked organizations this year. Intel’s shares fell 2.53% on the stock market to $22.09.
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