China State-Linked Agency Calls for Probe of Intel Security

(Bloomberg) — A Chinese agency backed by the country’s internet overseer is pushing for an investigation into Intel Corp. products sold domestically, warning of security flaws and high failure rates.

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The Cyber Security Association of China. a little-known entity backed by the powerful Cyberspace Administration of China, called in a public WeChat post for an investigation to protect consumers. It accused Intel of allowing built-in backdoors in chips for years, compromising user safety.

It’s unclear whether the CAC, which polices the country’s internet industry and data management regimes, has endorsed the association’s position. The low-profile grouping of internet companies and researchers was founded in 2016 and focuses on training and relationship-building within the industry.

“Intel products pose serious risks to national security,” the association said in its social media post.

Beijing has waged a campaign for years to reduce a reliance on foreign technology as US tensions ratcheted higher, urging enterprises to choose local alternatives.

In a statement Wednesday, the US chipmaker said it goes to “great lengths to protect our customers.”

“Security has long been a top priority for Intel,” the company said. “We look forward to working with the relevant officials on this matter to clarify any questions that may exist and demonstrate Intel’s deep commitment to the safety and security of our products.”

Chinese government-linked bodies have also pushed employees to ditch foreign brands such as iPhones. In 2022, Beijing ordered central government agencies and state-backed corporations to replace foreign-branded personal computers with domestic alternatives within two years, one of the most aggressive efforts to eradicate key overseas technology.

Still, calls targeting Intel have been rare given its dominance of the PC processor market and longstanding presence in China. In recent years, its clout has diminished as rivals such as Nvidia Corp. and Advanced Micro Devices Inc. gained market share in the post-PC era.

Intel’s shares fell further this week after ASML Holding NV cut its sales outlook, part of a global rout for the chip sector.

–With assistance from Jessica Sui and Ian King.

(Updates with Intel statement in sixth paragraph.)