Intel apologizes for statement about Xinjiang supplier

U.S. chipmaker Intel (Nasdaq: INTC) apologized in China on Thursday after sparking a backlash in a letter urging its suppliers not to source products or workers from the Xinjiang area, making it the latest western company that has fallen over legal issues in the country.

Intel recently released a letter to its suppliers that it called the December Annual Letter. It urges the company to ensure that its supply chain does not employ labor and that no goods or services are sourced from the Xinjiang area "after it has been restricted by several governments".

The United States has accused China of widespread human rights violations, including forced labor, in Xinjiang, home of the Muslim-majority Uyghurs. Beijing has repeatedly denied these allegations.

The letter from Intel, posted on the company's website and in multiple languages, sparked criticism on state and social media in China and called for a boycott.

In a Chinese-language statement posted on its official WeChat and Weibo (NASDAQ: WB) accounts on Thursday, Intel said its commitment to avoid supply chains from Xinjiang was an expression of compliance with US law, rather than an opinion this topic.

"We apologize for the inconvenience this has caused to our esteemed Chinese customers, partners, and the general public. Intel is committed to becoming a reliable technology partner and expediting joint development with China," said Intel.

Intel did not immediately respond to Reuters' requests for comment.

Other large multinational corporations have come under pressure to comply with sanctions related to Xinjiang while continuing to operate in China, a huge market and important supply base.

On China's Twitter-like Weibo, singer Karry Wang said he would no longer serve as Intel's brand ambassador, adding in a statement that "national interests are paramount".

Many Weibo users scoffed at Intel's apology in an attempt to protect sales in China, and one wrote, "A mistake is a mistake! Take back what I said about Xinjiang!"

The hashtag "Is Intel's apology sincere?" was on everyone's lips on Weibo on Thursday afternoon.

Intel, which has 10,000 employees in China, said in its apology that it "respects the sensitivity of the issue in China".

The Chinese State Department said that "allegations of forced labor in Xinjiang are lies hatched by anti-Chinese American forces" to destabilize China and hinder its development.

"We take note of the statement and hope that the company in question will respect the facts and distinguish right from wrong," said Foreign Ministry spokesman Zhao Lijian at a daily briefing in Beijing.

Intel is represented in China with assembly and test facilities in Shanghai and Chengdu, among others.

In July, Swedish fashion retailer H&M reported a 23% decline in sales in local currency in China for the March-May quarter after voicing concerns about the human rights situation in Xinjiang.