Intel faces headwinds in China as trade body calls for security probe

Intel products sold in China have been recommended for a security review by a local trade association that alleges the U.S. chipmaker poses "serious risks" to national security. 

In a statement on Wednesday evening, the Cybersecurity Association of China outlined alleged vulnerabilities in Intel's CPU chips, claiming that flaws in product quality and security management show an "irresponsible attitude toward its customers," according to a Google translation.

CSAC further accused Intel of using remote management features to surveil users while covertly installing backdoors and of failing to address defects reported by users. 

Daniel Newman, CEO of The Futurum Group, noted the security review comes amid increased tensions between China and the U.S. in regard to chip controls and AI leadership. 

"Given Intel's recent challenges, the timing is likely well orchestrated as Intel is up against a number of market challenges and now has to deal with China putting pressure on its significant revenue and market share in the region," Newman said. 

China accounted for 27.4% of Intel's revenue in 2023, making it vital to the company's bottom line at a time when its stock is struggling following poor earnings and job cuts.

However, under U.S. chip policy, the company has been restricted from exporting some of its most advanced products to Chinese clients. It has also been barred from shipping to certain Chinese clients altogether. 

In its statement, CSAC noted that Intel has also been one of the largest beneficiaries of the Biden administration's Chips and Science Act, which it says has unreasonably excluded and suppressed China's semiconductor industry. 

CSAC also took issue with the company requiring its suppliers not to use any labor or