Intel is in hot water after the Cyber Security Association of China called out the company for its cybersecurity vulnerabilities and high failure rates and accused it of adding backdoors to its covert surveillance and digital espionage systems. According to the statement (via China Daily), "Intel has made substantial profits in China, but it continues to engage in actions that harm China's interests and threaten national security."

According to data from Statista, China is Intel's largest source of revenue in 2023, making the company $14.85 billion. The U.S. is a close second, at $13.96 billion, but it will be a massive disaster for the company if it loses China, as it accounted for over a quarter of its over $54 billion revenue last year. This would be the nail in the coffin for the chipmaking giant unless the U.S. swoops in to save it, especially as it has recently announced losing $1.6 billion in its last quarterly earnings call.

The group highlighted severa l security vulnerabilities, including the GhostRace and Indirector attacks, which allow bad actors to steal sensitive and confidential data from CPUs. While the former affects different platforms, including Arm processors, the latter mostly hits Raptor Lake and Alder Lake chips, although Intel claims that its mitigation advice should protect most users.

Another point of contention of the group was the recent instability issues experienced by 13th and 14th Generation Intel Core processors. However, it has since addressed the problem with the 0x12b microcode update and released an extended warranty for the affected chips. As for the backdoor accusation, there hasn't been any substantial finding yet that proves it.

Intel is fighting to survive a major crisis, especially as it tries to right its ship after the billions of dollars in losses it incurred with its manufacturing and data center businesses. However, we should also note that the company is one of the pillars of t he White House's CHIPS Act investment, which is meant to jumpstart American innovation in the semiconductor industry. Team Blue received $8.5 billion in direct investments from the federal government.

Washington is simultaneously applying bans and sanctions against China's chip and AI industry, blocking it from sourcing high-end AI GPUs to protect its investments. It's also preventing Chinese companies, like Huawei, from participating in American and other allied countries on the allegation that the Chinese government uses them for spying, too.

Although this recent announcement hasn't resulted in any concrete moves against Intel yet, it has rocked the boat a bit, with the company's stock price falling by three percent at the market opening. Hopefully, this will not develop into a real action against Intel in China; otherwise, it will be in real trouble and could cause the company to implode.