US chip maker Intel triggers Chinese media backlash after telling suppliers to avoid Xinjiang labour

Intel’s letter to suppliers, published in several languages including Chinese, cited several compliance codes, including those of the Responsible Business Alliance
China, including Hong Kong, contributed the biggest proportion of Intel’s total revenue in the five years to 2020, according to data from Statista

Intel

Che Panin Beijing

Published: 6:30pm, 22 Dec 2021

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An open letter from Intel to its suppliers asking them not to use goods or labour from Xinjiang has created a public relations crisis for the US chip maker in China, reflecting the predicament facing American businesses amid escalating geopolitical tensions between Washington and Beijing.

In an open letter to suppliers published on its website, Intel said it has been “required to ensure that its supply chain does not use any labour or source goods or services from the Xinjiang region”.

The letter, published in several languages including Chinese, cited several compliance codes, including those of the Responsible Business Alliance, the world’s largest industry coalition dedicated to corporate social responsibility.

However, the letter did not refer to the Uygur Forced Labour Prevention Act, passed by the US House of Representatives earlier this month, which calls on the international community to reduce imports of any goods made with forced labour from Xinjiang.

In the letter, Intel also said it has received inquiries from investors and customers, asking whether the company purchases goods and services from the Xinjiang region.

On Tuesday, the letter was cited and reported by Chinese websites, including Guancha.cn, a pro-government Chinese news portal, immediately triggering criticism of the US chip maker by some netizens.

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Hu Xijin, former editor in chief of the nationalist tabloid Global Times, also weighed in with an opinion piece, accusing Intel of “helping the US wage a propaganda war” against China.

“For businesses like Intel, we need to take notes of the evil things they’ve done,” Hu, now a columnist for the newspaper, wrote. “The more powerful China is, the more capabilities we will have to take revenge against them.”

Intel declined to comment.

The Chinese government has not commented on the Intel letter, but on Tuesday Beijing announced sanctions against four members of a US government commission monitoring religious freedom, in response to Washington’s latest sanctions targeting China’s Xinjiang policies.

It is not immediately clear what the impact of Intel’s move will be, as Xinjiang’s pillar industries are agriculture and tourism.

China, including Hong Kong, contributed the biggest proportion of Intel’s total revenue in the five years to 2020, according to data from Statista, a data provider.

The US chip giant, known for its CPUs used in laptop computers, also operated a memory chip fabrication plant in Dalian, in northeast Liaoning province, but that facility will be transferred to SK Hynix after the South Korean company’s US$9 billion acquisition of Intel’s NAND memory and storage business received China’s regulatory approval on Tuesday.

Intel also has two assembly and test facilities in Chengdu, capital of Sichuan province.

Intel is the only US semiconductor company capable of producing chips using the 10-nanometre or less process node. The Post previously reported that it shelved a plan to expand capacity by taking over GlobalFoundries’ abandoned chip plant in Chengdu due to the US government’s disapproval.

Intel is not alone as a Western company caught between Washington and Beijing over Chinese policy on Xinjiang, but it appears to be the first global chip company in that spot.

In March, Western apparel brands including Nike, Zara and H&M faced a national boycott in China after they pledged not to use cotton from Xinjiang, citing accusations of human rights violations in the region. The US and other Western nations have accused Beijing of committing genocide against Uygurs and other Muslim minorities, a charge that has been repeatedly denied by Beijing.