Intel Tells China: No More Chips

Despite being a huge market, Intel Corp. said this week that it won’t ship any Wi-Fi chips to China after May of this year. This is in response to a new law in the People’s Republic of China that all Wi-Fi/802.11-based products in the country conform to a proprietary security standard.

China’s Wired Authentication and Privacy Infrastructure (WAPI) specification was created by the government with several Chinese vendors. Non-Chinese companies must partner with one of these 24 vendors to make any Wi-Fi products used in the People’s Republic. The WAPI intellectual property (IP) is controlled by these vendors.

Some pundits think that forcing companies to work with the Chinese vendors is a way to pump up the country’s flagging economy, some say that the forced partnerships puts foreign IP rights in jeopardy, and others assume that WAPI includes a “back door” that would allow the Chinese government access to encrypted data.

WAPI does not work with any of the existing 802.11 security standards. Foreign users traveling to China with Wi-Fi devices will sooon find themselves unable to connect to wireless networks there.

The law enforcing WAPI on foreign vendors takes effect June 1.

Intel says its announcement is based on technical issues, that the use of WAPI would undermine the quality standards of its products and that the technical challenges of converting to WAPI were too great to meet the deadline.

This move means sales of Intel Centrino-based notebooks, with embedded Wi-Fi to China will cease. Company’s like Dell have told the New York Times that they have a WAPI compliance plan in place despite Intel’s announcement, but provided no details.

Not much is known about WAPI — the Chinese have yet to provide a specification, so companies can’t even say for sure that it could be better or worse or much the same as Wi-Fi Protected Access (WPA) or the forthcoming 802.11i/WPA2.

Other companies have come out against WAPI, most notably chip maker Broadcom . They will also stop selling Wi-Fi chips to China in May.

However, competitors Atheros and Texas Instruments are going to go ahead with full support for WAPI.

The Bush Administration has also sent letters to China’s Vice Premiers Wu Yi and Zeng Peiyan in Beijing requesting the country to rethink the law requiring WAPI and to work toward a resolution. The letter was signed by Secretary of State Colin Powell, Secretary of Commerce Donald Evans, and U. S. trade representative Robert Zoellick. The letter says in part that forcing companies to partner with Chinese vendors is “inconsistent with China’s WTO (World Trade Organization) commitments.”

According to IDC, China is the second largest market for PCs in the world. Wi-Fi is relatively unknown there, but the wireless networking technology has the potential to see major growth in such an untapped market.

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