China 'put tiny chips in US PCs to steal tech secrets'

Tiny chips inserted in US computer equipment manufactured in China were used as part of a vast effort by Beijing to steal US technology secrets, according to Bloomberg.

Apple and Amazon have distanced themselves from claims that they were among US companies targeted by the Chinese hackers.

Bloomberg reported that the chips were inserted in computer motherboards manufactured in China for US-based supplier Super Micro Computer.

It said dozens of large US firms and agencies were using the hardware – but Amazon first discovered the chips, the size of a grain of rice, during a security review it ordered after buying a software firm called Elemental three years ago.

Bloomberg said the retail-to-cloud computing company alerted US authorities at the time, resulting in an inquiry and a string of firms cancelling Super Micro orders.

Image: Amazon said there was no evidence to support claims of malicious chips or hardware modifications

Its findings were released at a sensitive time given President Donald Trump’s trade war against China, partly linked to US accusations of intellectual property theft by Beijing.

Only a week ago, he further accused China of interfering in his country’s midterm elections.

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Video: Trump accuses China of election meddling

The computer chips, Bloomberg explained, enabled spies linked to the People’s Liberation Army – a unit of the Chinese forces – to create a “stealth doorway” into computer equipment through hardware – more difficult to detect than a software hack.

The report claimed that in addition to firms including Apple and Amazon, Super Micro also manufactured equipment for US Defence Department’s data centres and other federal government functions – some operated by Apple and Amazon Web Services.

Super Micro shares plunged by more than 50% at one stage in Thursday trading.

Bloomberg published a series of statements in response to its story – with each company distancing itself from the allegations.

Apple
Image: Apple says it has found no evidence to support Bloomberg’s claims

Apple said in a statement it had “never found malicious chips, ‘hardware manipulations’ or vulnerabilities purposely planted in any server”.

Amazon responded that “at no time, past or present, have we ever found any issues relating to modified hardware or malicious chips in Super Micro motherboards in any Elemental or Amazon systems.”

Super Micro also rejected Bloomberg’s reporting. Its statement said: “While we would cooperate with any government investigation, we are not aware of any investigation regarding this topic nor have we been contacted by any government agency in this regard.

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“We are not aware of any customer dropping Super Micro as a supplier for this type of issue.”

China’s ministry of foreign affairs responded by insisting it was a “resolute defender of cyber security”.

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