Intel is being accused by China of incorporating backdoors for purposes of espionage.
As per the Chinese Cybersecurity Association's (CSA) insights, Intel faces potential security threats. The CSA has advocated for an examination of Intel's offerings, a move that could significantly impact the market if implemented temporarily.
CNN reports that the US chipmaker is under scrutiny by the Cybersecurity Association of China (CSAC), which alleges that Intel's products consistently undermine China's security and national interests.
In a letter, the CSAC levels several accusations against Intel. Given their strong ties to China's powerful Cyberspace Regulatory Authority, the Cyberspace Administration of China (CAC), it's plausible that these demands will be acted upon.
The CSAC representatives argue that Intel's products commonly exhibit security flaws and high failure rates, and they push for an inspection to safeguard China's national security and the rights of its consumers.
Moreover, they claim that the operating systems incorporated into all Intel processors are susceptible to backdoors engineered by the US National Security Agency (NSA). Intel and CAC have yet to comment on these allegations, and Intel's share price dropped by 1.5% on Wednesday.
"The current relations between the US and China are tenuous, and the more discussions about trade limitations and tariffs, the more probable it is that reciprocal measures will be taken," CNN cited Dan Coatsworth, an investment analyst at AJ Bell.
A brief suspension of Intel products could also diminish the availability of AI chips in the Chinese market, which is currently grappling with finding viable alternatives to Nvidia's leading products.
Intel reigns supreme in the global market, but its inability to export chips to the People's Republic due to export limitations is well-known. Sources suggest that the company is developing a customized version of its AI chip specifically for the Chinese market.
The CSAC has suggested that the Commission should rigorously examine Intel's offerings in light of the alleged security threats, aligning with their proposal.In response to the CSAC's letter, the Commission's proposal could entail a thorough inspection of Intel's products to ensure they pose no threat to China's national security and consumer rights.
