Cybersecurity Lobby Group in China Calls for Review Intel Products

Chinese cybersecurity group, Cybersecurity Association of China (CSAC) has said products manufactured by US chip maker, Intel pose a security threat to China and should be subjected to security review.

The call for China’s review of Intel products is informed by allegations that Intel has constantly harmed the Asian country’s national interest. Reuters reported that CSAC is not a government body, but an industry-based entity. However, the entity enjoys close ties with the Chinese government.

Intel’s Security Gaps

CSAC posted a long list of accusations against Intel on its official WeChat platform. The cybersecurity group alleged that Intel products in China present threats for high failure rates and frequent vulnerabilities. The group alleged that in the past, Intel CPUS have exhibited multiple vulnerabilities.

The Chinese cybersecurity association also claimed that some chip series manufactured by the US semiconductor manufacturer caused video games to crash. According to the cybersecurity group, Intel has not been swift to respond to previous complaints on security breaches. The group says these weaknesses have the potential to compromise and expose users to cyberattacks, including hackings through a secret back-door system via Intel chips.

“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 said in the post.

Potential Regulatory Action

Due to the ties that the entity has with the Chinese government, CSAC’s post could potentially trigger a security review by the Cyberspace Administration of China (CAC). The CAC is a powerful government entity that regulates China’s cyberspace.

In 2023, the CAC banned local Chinese infrastructure operators from purchasing products manufactured by US-based memory chip maker, Micron Technology. The regulatory body took this action after stating that the products had failed the country’s network security review. Such a review of Intel products has the potential to hurt the company’s revenues in the coming quarter.

China uses Intel CPUs as the main processors in a wide range of electronic products including data center servers and laptops. In 2023, servers running on Intel’s X86 chips accounted for 90% of China’s CPU market. In the same year, Intel’s sales to Chinese companies represented 27% of its $54.2 billion total revenue.

Intel has been experiencing financial challenges for some time now. In September 2024, its poor financial position captured the attention of Apollo Global and led to an investment offer of up to $5 billion.

The giant CPU maker is among the semiconductor companies that are set to receive Chips Act funding from the US government. Intel signed a preliminary non-binding agreement with the U.S. Department of Commerce in March 2024 to receive direct funding amounting to $8.5 billion to advance its commercial semiconductor projects across the country.

Trading Allegations

The call by China’s cyber association to review Intel products comes at a time when the US is planning to impose restrictions on the sale of chip making components and equipment to China. The US has also blamed Chinese hackers for breaching its broadband provider networks in a cyberattack associated with the Chinese government.

“Relationships between the U.S. 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,” AJ Bell Investment Analyst Dan Coatsworth said.

This year, Intel secured orders for Xeon processors from various Chinese agencies that are linked to the government. The agencies need the processors to support their AI work. With the ongoing discussion on restricting the sale of US-manufactured chips to some countries, A ban on Intel products would only tighten AI chips supply in the Chinese market.