China Launches Probe Into Intel, Cites National Security Risks Amid Trade Tensions With US

In the ongoing trade tensions between the U.S. and China, the Cybersecurity Association of China (CSAC) has called for a security review of products from Intel Corporation (NASDAQ:INTC), citing potential threats to national security.

What Happened: CSAC has raised concerns over alleged flaws in Intel’s CPU chips and security management. The trade body accused Intel of using remote management features for surveillance and covertly installing backdoors, while also criticizing the company for not addressing reported defects, CNBC reported on Thursday.

The security review comes amidst escalating tensions between China and the U.S. over chip controls and AI leadership. Daniel Newman, CEO of The Futurum Group, noted that the timing of the review is likely strategic, given Intel’s recent challenges and its significant revenue and market share in the region.

See Also: Amid Fear Of China’s Access To Nvidia, AMD Chips Through Middle East, This CEO Assures UAE Reliable Partner For US: ‘We Can Guarantee The Safety And Security Of This Technology’

In 2023, China accounted for 27.4% of Intel’s revenue. However, U.S. chip policy has restricted Intel from exporting some of its most advanced products to Chinese clients and has barred it from shipping to certain Chinese clients altogether. CSAC also criticized Intel for benefiting from the Biden administration’s Chips and Science Act, which it claims has unreasonably suppressed China’s semiconductor industry.

Intel responded to the allegations by stating that it prioritizes product safety and quality and will maintain communication with the relevant authorities to clarify the issues raised.

Why It Matters: Earlier this year, Intel announced plans to launch two artificial intelligence chips with diminished capabilities to comply with U.S. semiconductor sanctions. The company aimed to maximize its chip exports to China, despite strict U.S. export controls.

Meanwhile, China has been heavily investing in its semiconductor industry, with investments in chipmaking equipment reaching $25 billion in the first half of 2024. This figure is higher than the combined spending of South Korea, Taiwan, and the U.S.

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Photo courtesy: Unsplash

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari