TP-Link is widely recognized for its routers, but its product line has expanded to encompass various smart home gadgets including smart plugs, lights, thermostats, and switches. However, recent reports suggest that the company’s router segment might face significant challenges, as the US government is contemplating a ban on TP-Link routers due to apprehensions about security.
Investigations Underway
According to a report from the Wall Street Journal, TP-Link is currently under investigation by multiple US departments, including Commerce, Defense, and Justice, because of its alleged connections to Chinese cyber attacks. Sources indicate that the Commerce Department has already issued a subpoena to TP-Link earlier this year.
Potential Impact on Sales
The report suggests that the government might impose a ban on the sale of TP-Link routers by 2025, which currently account for approximately 65% of router sales in the US market. These routers are not just prevalent in homes; they are also utilized by businesses and some federal agencies, including the Defense Department. Furthermore, a report released in 2023 by a US agency highlighted vulnerabilities in TP-Link routers that could potentially facilitate cyber attacks.
Political Pressure and Market Reactions
In a related piece from Reuters, it was noted that in August, two US lawmakers called for an investigation into TP-Link, raising alarms about the potential for its routers to be exploited in cyber attacks against the United States. The Chinese foreign ministry has responded by criticizing the US for what it views as an overreach regarding national security, claiming that the US is unfairly targeting companies from certain nations.
The speculation surrounding a possible ban on TP-Link has reportedly led to a surge in shares for its American competitor, Netgear, which saw an increase of more than 12% on Wednesday. Notably, routers from Netgear and Cisco were implicated in the Volt Typhoon hacking initiative, which is believed to be associated with the Chinese government.
Sources: Wall Street Journal, via Reuters, The Verge
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