Intel runs into major WiMax snafu in Taiwan

An apparent lack of communication between Intel and the Taiwan government over the closing of Intel's WiMax Program Office in Taiwan has brewed into a media storm here to rival Apple's Antennagate in the U.S.

The Taiwan government and some senior executives with interest in WiMax wireless broadband technology appear to believe that the closing of the WiMax office means Intel is dumping the technology altogether. The idea has caused frustration because Intel was a prime reason behind their backing of WiMax and the company's abandonment would call WiMax technology itself into question.

The controversy reached a climax late Tuesday, after another sell-off in Taiwanese stocks related to the WiMax industry. Taiwan's economics ministry held a press conference to tell reporters it plans to continue promoting WiMax despite the "fact" Intel has dropped the technology.

"Taiwan’s WiMax policy is the result of careful planning by industry, government and academic experts, who set a blueprint for Taiwan’s WiMax development. Taiwanese industry and government have strong confidence in the continued development and promotion of the technology, and a change in one company’s internal organization or direction will not change the government’s policy," the economics ministry said in a statement.

Despite the controversy Intel insists it has not backed off WiMax. It decided to close the program office in Taiwan because the office accomplished its mission, promoting WiMax, and the people in the office were to be put into new roles where they could lead WiMax technology development among various Intel product groups.

But that message has not gotten through to Taiwan.

It all started a few weeks ago when Intel decided to close the office. News of the office closing leaked in a news report by Taiwan's Digitimes newspaper, which spun the news into a story that Intel was abandoning WiMax technology altogether.

The article includes an interview with Taiwan's vice minister of economic affairs, quoting him saying that the only reason Taiwan agreed to promote WiMax technology was because of the backing by a major technology company, Intel. The article does not provide any comment from Intel and it's unclear whether the reporters asked the company for comment or not.

Intel has acknowledged it may have made a mistake by failing to notify the Taiwan government of the decision to close the office.

The lack of communication is a problem because Intel signed a memorandum of understanding with the Taiwan government to promote WiMax, launching an effort by Taiwanese industry and government offices to move WiMax into the mainstream. Taiwan put money into WiMax research and testing centers, sold WiMax licenses to promote the use of the technology throughout the island (several networks are already up and running), and made it part of the M-Taiwan plan, to ensure wireless broadband reaches every person in Taiwan, including remote mountain villages and small outlying islands.

Still, Intel released a statement to the media that said it remained committed to WiMax technology, and apparently believed the statement should ease any doubts.

It was wrong.

At first, the issue died down, but that all changed last Friday when Chinese-language newspapers in Taiwan reported that Acer Chairman J.T. Wang voiced concerns over Intel's exit from WiMax, sending the issue roaring back to the spotlight.

Acer spokespeople did not return repeated calls to mobile phones and office lines, nor reply to e-mails requesting comment.

And the press conference on Tuesday appears to be just a prelude to more to come. The conference included major government figures as well as dozens of industry luminaries, all angry over the issue.

'Taiwan awaits Intel's reply on WiMAX withdrawal speculation,' reads one headline that went out after the news conference.

Intel says it wasn't even invited to the press conference, and only heard about it after the fact.

The news flow on Intel in Taiwan on Wednesday showed another escalation of the issue. One Chinese-language news report says the Taiwan government is being advised to contact Intel's rival, Arm Holdings, to seek alliances with Arm instead of Intel in the communications area. Another says J.T. Wang will meet with the head of the economics ministry to discuss how to jointly promote WiMax "in the aftermath of Intel's decision to pull out of the sector."

Intel spokespeople in Asia seem perplexed by all the fuss, and are unsure why the rumor persists.

"All we can do is reiterate the fact that nothing has changed. Intel remains committed to WiMax," said Intel spokesman Nick Jacobs, in an email.

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