Police in the Chinese city of Shenzhen have reportedly busted a massive network involved in counterfeiting electronic chips, leading to a warning that consumers should be extremely cautious when purchasing parts for personal computers.

The operation uncovered a sophisticated scheme where discarded chips were recycled by being relabeled, restamped with new numbers and then fraudulently marketed as big-name brands and sold through companies posing as foreign distributors.

This revelation was first reported by the South China Morning Post, citing information from China’s Rule-of-Law Daily. The police investigation spanned four months before the raid, resulting in the arrest of at least one suspect. Authorities have begun coordinating with international chip manufacturers to assess the scope of potentially affected inventory.

The hardware suspected of being compromised by these counterfeit chips is primarily motherboards, graphic cards and power supply units (PSUs). The tampered components are largely Power ICs, such as MOSFETs and voltage regulators, which are crucial elements of the Voltage Regulator Modules (VRMs) on motherboards and GPUs.

While the counterfeit devices might not fail instantly, issues can be expected to surface under heavy computational load, such as during GPU Boost or intense video rendering.

Potential symptoms of a compromised system include random restarts when handling large file transfers, abnormal noises like coil whine from the cooling system after a period of use, and a noticeable decline in overall system performance and speed.

Diagnosing these issues can be challenging, as they present as subtle, creeping problems rather than an immediate failure like a PC failing to boot, potentially leading users to mistakenly blame software or a faulty PSU.

Part of the impetus for the proliferation of counterfeit chips is attributed to the ongoing technology conflict and US sanctions that restrict the export of certain high-end components to China. This scarcity has fueled a booming grey market and an increased demand for counterfeit alternatives.

The situation is compounded by recent geopolitical friction. Last September, China’s Ministry of Commerce announced an anti-dumping investigation into US analogue chip companies operating in China, while the US simultaneously tightened export controls, reportedly embedding tracking devices in high-end chip shipments to prevent illicit diversion. This tense environment has created an opening for opportunists to exploit the high demand by supplying counterfeit goods.

In my assessment, the individuals most at risk of acquiring hardware with these fake chips are online shoppers. The core of the news story revolves around misrepresenting famous brand names, a practice frequently observed on numerous online marketplaces.

I have seen similar issues firsthand; a colleague once purchased a 512GB microSD card from an online platform for just 500 bath (when the typical price was around 1,590 bath). The card only functioned for a single use and could not be returned or claimed under warranty.

To ensure authenticity, the safest approach is to purchase directly from the brand’s official retail outlets. If online purchasing is necessary, consumers should rigorously vet the seller, confirm the availability of a warranty and look for official ‘MALL’ badges on the platform, which usually offer a higher degree of assurance.

Additionally, scrutinizing the estimated delivery date, especially avoiding anything taking significantly longer than the standard 1–7 days, can indicate the product is being shipped from overseas, potentially increasing risk.

Source: tomshardware