SEC Tells Intel That The Cubans Have Celeron Processors

Intel Corporation has been taking a bit of heat from the government lately, both domestic and abroad.  In May, the European Union fined Intel $1.45 billion over anti-competitive practices.  And two months ago Intel received a letter last week that PCs in Cuba contain Celeron processors even though there is an embargo.

Dealing with the European Union
Interestingly ombudsman P. Nikiforos Diamandouros criticized the EU for not recording the case file in the decision against the chipmaker.  And a Dell executive cited AMD’s performance being poor as the reason why the PC manufacturing company chose Intel as their supplier.  This makes the verdict of the decision to penalize Intel seem a bit off.  More details to follow as discussions arise on this topic.

Dealing with the U.S. Securities and Exchange Commission
The SEC sent Intel a confidential letter on June 4th stating the following:
“We are aware of a May 2008 news report that PCs in Cuba contain your Celeron processors. Cuba, Iran, Sudan, and Syria are identified by the State Department as state sponsors of terrorism, and are subject to U.S. economic sanctions and export controls.”

In addition, the SEC wrote “We note that your Form 10-K does not include disclosure regarding contacts with Cuba, Iran, Sudan, and Syria. Please describe to us the nature and extent of any past, current, and anticipated contacts with the referenced countries, whether through distributors, resellers, licensees, or other direct or indirect arrangements.”

The Cubans have PCs that have Intel Celeron processors with 80GB hard drives and 512MB of RAM.  They also have the Windows XP operating system.  Intel responded with the following letter:

“Intel has no business contacts with the Subject Countries, either directly or indirectly through tacit agreement with its customers. Intel does not provide products or technology to the Subject Countries….”

To be honest, perhaps it is a good thing that all the Celerons are ending up in Cuba.  They should even take computers marked with “dual-core” processors.  And let’s give the Americans more Core 2 Duos!

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at
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