The China Cyberspace Security Association has highlighted the need for a thorough investigation into the cybersecurity risks associated with Intel (INTC, Financial) products. Since 2024, several vulnerabilities like GhostRace, NativeBHI, and Indirector have been found in Intel's CPU products, raising concerns about the company's commitment to product quality and security management. Intel's significant flaws suggest a disregard for the interests of its clients.
Intel generates over $50 billion in annual revenue globally, with nearly a quarter stemming from the Chinese market. In 2021, Intel CPUs dominated about 77% of the domestic desktop market and around 81% of the notebook market in China. The company's x86 server market share in China was approximately 91% in 2022. Despite its extensive earnings in China, Intel has been accused of actions that undermine Chinese interests and threaten national security.
Previously, the U.S government introduced the CHIPS and Science Act, which aimed at marginalizing China's semiconductor industry. Intel emerged as a major beneficiary of this act, receiving $8.5 billion in direct subsidies and $11 billion in low-interest loans. To align with U.S. government priorities, Intel adopted stances on sensitive issues like Xinjiang, requiring its suppliers not to use labor or procure products or services from the region. Intel's financial reports have placed Taiwan alongside China, the U.S., and Singapore. Furthermore, Intel has ceased supplying companies like Huawei and ZTE, actions seen as harming Chinese interests.
The China Cyberspace Security Association recommends initiating cybersecurity audits of Intel's sales in China to safeguard national security and consumer rights. This development has led to Intel's shares dropping 1.5% pre-market.
In its second fiscal quarter earnings for 2024, Intel reported revenue of $12.8 billion, marking a 1% decline year-over-year. The company declared a net loss of $1.6 billion, a stark contrast to the $1.5 billion net profit in the same quarter the previous year. The adjusted net profit, not following GAAP standards, was $100 million, a significant 85% decrease from $500 million the prior year. Notably, Intel's adjusted earnings per share and revenue fell short of Wall Street's expectations, and its forecasts for the third quarter were similarly disappointing.
Intel also announced a plan to cut over 15% of its workforce as part of a $10 billion cost-reduction strategy.
