Intel China responds after influential Chinese cybersecurity association called for a security review of its products sold there

Intel has responded publicly after Cybersecurity Association of China (CSAC) alleged on Wednesday that the US chip maker has “constantly harmed” the country’s national security and interests.

According to a Reuters report, while CSAC is an industry group rather than a government body, it has close ties to the Chinese state. A raft of accusations against Intel were reportedly published in a long post on its official WeChat account, which could potentially trigger a security review from China’s powerful cyberspace regulator, the Cyberspace Administration of China (CAC).

It comes after it was reported in March this year that Beijing had issued guidelines to phase out American processors from the likes of AMD and Intel, in favour of domestic chips, for government computers.

China allegations

The Chinese government was also reportedly seeking to sideline the use of Microsoft’s Windows operating system, as well as foreign-made database software.

Now CSAC is calling for a review of Intel’s products sold in China.

“It is recommended that a network security review is initiated on the products Intel sells in China, so as to effectively safeguard China’s national security and the legitimate rights and interests of Chinese consumers,” CSAC had said on Wednesday.

CSAC in its post reportedly accuses Intel chips, including Xeon processors used for artificial intelligence tasks, of carrying several vulnerabilities, concluding that Intel “has major defects when it comes to product quality, security management, indicating that it is extremely irresponsible attitude towards customers.”

The industry group goes on to allege that operating systems embedded in all Intel processors are vulnerable to backdoors created by the US National Security Agency (NSA).

“This poses a great security threat to the critical information infrastructures of countries all over the world, including China … the use of Intel products poses a serious risk to national security,” CSAC reportedly said.

Intel’s response

But Intel’s China unit reportedly said on Thursday it has always prioritised product safety and quality, amid concerns a security review from China’s cyberspace regulator could hit Intel’s sales in China, which generated over a quarter of the company’s revenues last year.

“We will maintain communication with the relevant authorities, clarify any concerns, and reaffirm our commitment to product safety and quality,” Intel’s China unit reportedly said in a statement on its official WeChat account, in response to the earlier allegations from CSAC.

A ban, even if temporary, on Intel products could further tighten the supply of AI chips in the Chinese market, which has struggled to find viable alternatives to cutting-edge products from Nvidia which dominate globally but are now banned from export to China, Reuters noted.

Intel this year reportedly secured orders for its Xeon processors from several Chinese state-linked agencies for use in AI work, according to a Reuters review of public tenders.

In July 2023 Intel chief executive Pat Gelsinger had concluded a low-profile visit to China, as the company continues to emphasise the country as a key market and a critical part of its supply chain amidst rising tensions with the US.

The visit coincided with Intel’s launch of a Chinese version of the Habana Gaudi 2 accelerator chip for AI workloads.

Geopolitical issues

But Intel is right to be concerned about the latest developments, considering what happened in 2023 to American memory chip maker Micro Technology in China.

CAC in May 2023 had banned Micron products from being used by mainland operators of critical information infrastructure, saying the US company had failed to pass a security review.

The move was largely seen as a response to export controls imposed by the US in October 2022 that prevent Chinese companies from buying advanced semiconductors and high-end chipmaking equipment, in an attempt to halt the modernisation of China’s military.

Micron had said a quarter of its revenues had come from Hong Kong and mainland China, and in July 2023 Micron president and chief executive Sanjay Mehrotra visited China and met with senior government figures, including officials from China’s Ministry of Commerce, in an unsuccessful bid to set aside the sanctions.

In March 2023 in emerged that the US had allowed Intel to continue selling hundreds of millions of dollars’ worth of chips to the Chinese telecoms giant Huawei, despite it being a heavily sanctioned Chinese company.

Then in April 2024 both Intel and Qualcomm complained of the sales impact after United States revoked some of their export licences to China.