Intel Tells China: No More Chips
Eric Griffith
03/11/2004


 This article can be found online at the following location:
 http://www.wi-fiplanet.com/news/article.php/3324601



Despite being a huge market, Intel Corp. (Quote, Chart) 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 (Quote, Chart). They will also stop selling Wi-Fi chips to
 China in May.

 However, competitors Atheros (Quote, Chart) and Texas Instruments
 (Quote, Chart) 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.


BINNEH S MINTEH

NEW YORK UNIVERSITY

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