Intel resists China's WAPI standard, says it amounts to unfair competition

Chip giant Intel Corp is not budging its position in its dispute with China on the implementation of a separate wireless network equipment standard in the middle of the year, a top Intel official said yesterday.

"We expressed our issues on this topic [to the Chinese government] ... We haven't changed our position. Hopefully, we'll get this issue resolved by June 1," Intel chief executive Craig Barrett said at a press conference yesterday.

Barrett, 64, was in Taipei yesterday during the first leg of his Asian tour. He will visit Malaysia today before departing on a three-day tour to China.

China planned to implement a new standard for wireless authentication and privacy infrastructure (WAPI) on June 1 this year that would require all wireless imports to carry encryption technology produced only in China.

However, the requirements for use of Chinese technology to meet WAPI specifications have invited concerns about unfair competition from Intel and its US peers such as Texas Instruments Inc and Broadcom Corp.

Barrett declined to elaborate on the matter.

But Stanley Huang (黃逸松), Intel Asia Pacific's director of marketing and technical services, said the company was still in talks with the Chinese government.

"We already addressed the difficulty of meeting that deadline. Until now, no substantial progress has been made," Huang told the Taipei Times.

Intel has been vocal in its opposition to the WAPI standard and said it has no plan to sell chips supporting China's WAPI standard. In this regard, the company may stop selling its wireless Internet, or Wi-Fi, chips in China, given the Chinese government's insistence over the issue.

"Intel's tough stance is understandable as it will suffer the brunt of the implementation. The WAPI implementation could thwart sales of Centrino-based laptop computers in China," said Lu Chia-lin (呂家霖), a communications analyst at Yuanta Core Pacific Securities (元大京華證券).

On top of that, wireless Internet tends to be established on a more open platform around the world, which has made it more unacceptable for Wi-Fi chip suppliers to conform to a specific standard like WAPI, Lu said.

"The wireless Internet sector is a far cry from the telecommunications industry, which allows different countries to adopt different standards," he said.

Benny Lo (盧志恆), an analyst at Primasia Securities, offered a different perspective on the tussle over wireless standards.

"Now Intel still has leeway to bargain as its wireless chip sales in China only make up a small part of its total revenues," Lo said.

But Intel and others may bow to the pressure to reduce the risk of losing market share in China.