The Cybersecurity Association of China (CSAC) has called for a review of Intel's products sold in China, citing national security threats due to vulnerabilities and high failure rates.

Among the allegations, the CSAC claims that Intel has included a backdoor in nearly all of its CPUs since 2008, purportedly as part of a security system developed by the U.S. National Security Agency.

Intel has been actively pursuing business with Chinese state-linked agencies for its Xeon processors, making the potential investigation particularly impactful.

A potential review or ban of Intel products in China could severely impact the company, which is already grappling with declining share prices and revenues.

The organization has specifically pointed out vulnerabilities in Intel's chips, including those in Xeon processors utilized for artificial intelligence applications.

This scrutiny comes as the U.S. has imposed export restrictions on advanced chips to China, driven by concerns over military access to high-performance computing and AI technology.

Intel has previously warned that these U.S. export restrictions could adversely affect its sales in China, a market that accounted for approximately 27.4% of its revenue in 2023.

Following the news of the CSAC's allegations, Intel shares fell around 4%, though they partially recovered to trade about 1% lower.

The situation is further complicated by Washington's ongoing efforts to impose bans on China's chip and AI industries, which aim to protect U.S. investments.

In response to the allegations, Intel's China unit expressed its commitment to product safety and quality, stating it would engage with relevant authorities to clarify concerns.

These developments occur amid heightened tensions between the U.S. and China regarding cybersecurity, with both nations making accusations against each other.

Given the CSAC's close ties to the Chinese government, its recommendations could prompt an official security review by the Cyberspace Administration of China.