Intel forms chip venture in China, with eye toward cybersecurity concerns

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Intel Corp. has formed an unusual chip venture with two partners in China that could help address concerns about the security of imported technology.

The arrangement with Tsinghua University and Montage Technology Global Holdings Ltd., aided by more than $100 million in research funding from Intel, follows calls by Chinese officials to reduce the country’s reliance on foreign-made semiconductors—particularly those used in systems that could be targeted by spies from abroad.

Intel INTC, -0.03%  said the university, known as TU, will develop a programmable chip that would be placed in a plastic module alongside one of its Xeon microprocessors, the most widely used calculating engine in corporate and government data centers. The additional chip—called a reconfigurable computing processor, or RCP—and associated software developed by the university would add capabilities that address “specific local requirements.”

The company declined to discuss what those requirements may be. But Martin Reynolds, a Gartner Inc. analyst briefed on the ventures, said a likely possibility is that the RCP would help ensure that the Intel chip doesn’t carry out suspicious activity.

“It lets you kind of prove the Xeon is behaving as it is supposed to be,” Reynolds said.