China’s cyber regulator launches sweeping review of Intel chips amid escalating tech tensions with US? The Chinese Cyber Safety Association announced on October 16 that it may investigate Intel CPUs purchased in mainland China due to “persistent vulnerabilities and high failure rates.”
Following the incident, Intel’s Chinese division quickly issued a statement, reaffirming its commitment to operating within “the country’s laws and regulations” while highlighting its focus on
Market impression and timing
As Intel’s revenue from China stood at a substantial 27.4% in 2023, the potential consequences for the company could not have been more significant. At a moment of significant crisis, this high-profile marketing campaign is being launched by the corporation, which has been grappling with plummeting profits and painful layoffs in recent times. The scenario is further complicated by US export controls that have already restricted Intel from promoting its most advanced products to Chinese customers.
China’s latest move against US tech companies mirrors the country’s earlier approach to regulating American firms operating within its borders? In 2023, China implemented various measures to counter Micron Technology’s dominance, leading to significant market disruptions. Following a comprehensive cybersecurity probe that identified concerns over community security risks, Chinese regulatory bodies issued a ban on key infrastructure companies purchasing Micron products, triggering significant market disruptions valued at billions of dollars.
The broader context
The California State Athletic Commission’s criticism goes beyond just safety concerns. Intel’s prominent position was underscored as a significant beneficiary of the Biden administration’s CHIPS and Science Act, with the company arguing that the legislation unfairly targets China’s semiconductor industry. The group also expressed concerns about Intel’s supplier policies that prohibit the use of products and labor from China’s Xinjiang region, a requirement consistent with US regulations but disputed by Chinese officials?
As scrutiny intensifies, Chinese-language homegrown CPU producers like Loongson, Zhaoxin, and Hygon are making significant progress. China’s domestic businesses are said to have secured more than half of the market share in state-owned enterprises and public procurement sectors, indicating a growing capacity to reduce reliance on foreign chip suppliers.
China has initiated its self-sufficiency drive, allegedly instructing major state-controlled telecom operators to systematically remove international semiconductor components from their networks. As pressure mounts for self-reliance and regulatory scrutiny targets multinational corporations, it becomes imperative to develop a strategic approach that addresses US technology restrictions while fostering domestic alternatives.
Business implications
As the global landscape evolves, this pivotal event is poised to accelerate multiple transformations: China’s pursuit of technological autonomy, the reshuffling of global supply chains, and the increasing polarization of the world’s knowledge infrastructure into distinct US and Chinese spheres of influence.
As Intel and other US tech giants navigate the complexities of doing business in China, they must balance compliance with US export controls against access to this vital market, highlighting the precarious nature of their global operations. As tensions continue to escalate, the technology sector appears poised to remain at the vanguard of the US-China strategic rivalry.
