back to article Chinese tech titans' share prices slump after THAT Super Micro story

The ripple effect of explosive claims that Chinese government agents slipped snooper chips into Super Micro servers used by Apple and Amazon today dented the share price of the Middle Kingdom's tech titans. Bloomberg yesterday alleged that chips built to look like signal conditioning couplers were included in the data centre …

  1. Anonymous Coward
    Anonymous Coward

    One thing is certain:

    "the allegation of chips and Chinese snoopers is set to intensify the already bad-tempered relations between the Chinese and US administrations."

    Indeed, and it appears to be the only certainty in this affair; nothing else about it adds up.

    1. Julz
      Black Helicopters

      Re: One thing is certain:

      Well if you were, lets say, interested in repatriating manufacturing of high tech goods back to the homeland, then casting serious doubts over the integrity of overseas manufactured goods might not be a bad move. It might even be true but whether it is or it isn't is not really that important if your main objective is playing out in the minds of your own people.

      1. big_D Silver badge
        Black Helicopters

        Re: One thing is certain:

        @Julz yes, that was my first thought on reading the Bloomberg article, ex-TLA workers spoke with Bloomberg and everybody else involved denied it.

        So, somebody allgedly from spook-central told Bloomberg about it, but those allegedly "involved" know nothing? Did someone set up the reporter?

        1. Anonymous Coward
          Anonymous Coward

          Re: One thing is certain:

          Wonder if Trevor Pott is going to reappear to write a piece on the marvels of Super Micro?

          Didn't he stop writing here around 2015?

          1. Trevor_Pott Gold badge


            Even if all of this is true - and I honestly have no way of knowing if it is - I am not sure Supermicro would be to blame for this. Or, if they are, at least not any more than Cisco is when tampers with their stuff.

            I don't know...if this is true, and the Chinese have both the technology and the expertise to pull this off...why would this be limited to Supermicro in any way? Wouldn't they be doing this to all vendors that supply their high value targets? Who else might be doing it? I have so many questions.

            The one thing I don't believe, however, is that any of the brass at Supermicro would be in on it. This isn't because I don't think it couldn't happen...but because I don't think the brass at Supermicro are all that plugged in to the factory floor. Supermicro is run by engineers. They like R&D. They like design and testing. They all seem to absolutely loathe logistics.

            And there's evidence of that in how Supermicro comports itself. Supermicro is absolutely terrible at parts and component distribution in a number of geos. They have significant delays on system sourcing to partners in almost every geo, and I'm pretty sure their shipping department couldn't find their own ass with two hands, a roadmap and a sherpa. That's not the sort of thing you'd expect is top executives were concerning themselves with details like product assembly or distribution.

            So all of that brings me back to: I'm unsure what to make of all of this. I just don't have enough data, and I've poked my contacts at Supermicro to see what I can uncover. From what I know of the people involved, I think it's entirely possible that Supermicro's production facilities could have been compromised and the executive layer be completely unaware of it. Whether they have or not, who can say? It will be interesting to see it play out.

    2. Rupert Fiennes Bronze badge

      Re: One thing is certain:

      Well, given the very tight official or unofficial links between the Chinese state and both private and state owned businesses in China, it was bound to happen sooner or later. Just as we've all got used to "you cannot trust the network", now after this and SPECTRE we can now progress to "you can't trust the hardware". Looks like hardware security modules are going to make a comeback...

      1. steelpillow Silver badge

        Re: One thing is certain:

        @ Rupert Fiennes: Of course, the security module's I/O channels will be open to the same kind of CITM (chip-in-the-middle) compromise, especially if the main chip is also made in China.

  2. Mycho Silver badge

    "Share price recovered to a degree"

    In the finance industry this kind of recovery is known as a 'dead cat bounce' - it's not a recovery so much as part of hitting the bottom of the fall. Look at any share price that plummets and you'll see the same thing.

  3. spodula


    I Hope someone can get one of these chips! i think a public Decap to see how they work would be interesting!

    1. Andy The Hat Silver badge

      Re: Interested

      ... but they don't exist ... allegedly ...

      1. Anonymous Coward
        Anonymous Coward

        Re: Interested

        So, what's the black market price of a suitably vintage SuperMicro server?

        1. Jack of Shadows Silver badge

          Re: Interested

          We'll have to wait and see. So far, nothing pops up for now. Vintage Super Micro servers are something that I track daily, among other items, as I have a clutch of Xeons that could use an inexpensive home. Then I could poke and prod that chip, if it exists, to my heart's content.

          True, I have the oddest definition of fun I've encountered. 'Twould be rapture.

  4. Anonymous Coward
    Anonymous Coward

    Yet another example of the need for security

    IMO Nations that can do their own manufacturing, should do their own manufacturing. That is also true for food and other basic services. Supplying such basics should the measure of which countries are Nations and which are just territories or puppets for the more powerful.

    We are not living in a play nice world where Nations can trust that other Nations will care for them. Being dependent on other equally, or worst yet more powerful, Nations is and always has been a predictor of capitulation, defeat, even destruction.

    The law of power governs the world. Trade agreements and intertwining of economies does not change that and history has shown many times, such arrangements do not protect the weak or vulnerable.

    To be secure, to have a defense, in the 21st century is to ensure a Nation can feed itself and protect itself from psychical and digital threats, without that there is no Nation, just a subsidiary or territory pretending to be a Nation.

    As always it is the citizens who will be made to pay the ultimate price for that reality, which is why we tried democracy, we pay we should have a say. The game of Global domination never stops and in many ways is most active when Nations, people, the fodder, think they are safe.

    Letting another country build your infrastructure has always been a bad idea, even more so when it comes to our digital infrastructure. Hopefully no one reads this and thinks that just applies to their relationship with China, but no doubt many will and the wheel keeps turning.

    1. rg287 Bronze badge

      Re: Yet another example of the need for security


      Which is not to say that we should be self-sufficient or that every country needs it's own semi-conductor fabs, but there is an intense concentration of tech manufacturing in South-East Asia. We all recall the global shortage of hard drives in 2011 following heavy flooding in Thailand, and a significant earthquake caused global shortages of RAM in the 90s.

      The idea that we have limited native sources of x86 chips or core electronic components in Europe (for instance) is bizarre. India has taken steps to encourage investment in domestic semiconductor manufacturing, which at least spreads some risk from natural disasters and major weather events. I get that Europeans cost more than your average Asian factory worker, but it's amazing there isn't an economic case for at least one big fab in Europe for business continuity (and to supply European National Security contracts). It's incredible that so much of the world's semi-conductor manufacturing is around the Pacific Ring of Fire, subject to flooding, earthquakes and typhoons, as well as potential political interference (for those in or under the influence of Beijing).

    2. Stevie Silver badge

      Re: Yet another example of the need for security

      The problem is that domestic manufacturers cannot compete on price, and the buying public will always go cheap over political every time.

      Actually there's another problem with chip-fabbing. It is incredibly filthy, doing all sorts of long-term nasty to the environment in which it takes place. The costs of cleanup, often left to he taxpayer, were one reason for moving such things offshore in the first place.

      1. Rupert Fiennes Bronze badge

        Re: Yet another example of the need for security

        There's actually Intel super fabs in Ireland and Israel. They don't *need* to be offshore and dirty :-)

      2. Jay Lenovo Silver badge

        Re: Yet another example of the need for security

        While first world nations want green laws, they largely don't demand their consumption choices restricted to that hallmark.

        There will always be another country willing to fill demand inhibited by the destination's local laws.

        Now the addicts are dismayed their dealers are taking liberties with their ill begotten goods.

        1. DougS Silver badge

          Re: Yet another example of the need for security

          Intel also has huge fabs in Arizona and Oregon. They produce the majority of their chips inside the US. Fabbing is not particular dirty, though it is rather water intensive (yeah, I don't know why they have fabs in Arizona, either)

          Fabbing of chips is just a minuscule percentage of the overall supply chain though, and building stuff in the US isn't necessarily a solution. Who says the CIA can't bribe or infiltrate a US company? As far as the board in my home PC, I'd rather have it bugged by China than the US. I don't have to deal with the Chinese government since I don't live there, and they don't have any reason to care what I do or say. I can't make the same claims about the US government, so them having a spy in my PC is a much bigger deal as far as I'm concerned.

          If I was a Chinese citizen I'd rather have the US government spying on me than the Chinese government, but unfortunately for them it is a choice between China or China AND the US, not either/or...

          1. eldakka Silver badge

            Re: Yet another example of the need for security

            Fabbing is not particular dirty,

            While it doesn't produce much airborne pollution that would require the more traditional heavy industry signatures of smoke-stacks, it is still very dirty. It uses truckloads (literally) of highly toxic solvents and acids. Heavy metals. All which, if not handled and disposed of properly, can severely contaminate the factory and its surroundings.

          2. Mark 65 Silver badge

            Re: Yet another example of the need for security


            Tax breaks, subsidies and other gifts I'd imagine.

  5. big_D Silver badge

    Other Chinese companies?

    The report sent the stock market value of Super Micro down by 50 per cent, and though the share price recovered to a degree, it is still down by more than 40 per cent at the time of writing. Apple and Amazon shares fell by a couple of per cent and remain in that ballpark.

    However, other Chinese vendors unconnected to the bombshell also saw their market cap shrink today

    The last time I looked, Amazon was a US based company in Seattle, Apple and SuperMicro are both surfer dudes from sunny Califormia...

  6. Anonymous Coward
    Anonymous Coward

    Interesting Observation

    The word "alleged" appears in the body of this article no fewer than four times. This reservation in tone seems unprecedented for an outfit that delights in "biting the hand that feeds IT".

    1. Anonymous Coward
      Anonymous Coward

      Re: Interesting Observation

      Perhaps something to do with not inviting the lawyers to shaft you when all the facts aren't fully known!?

  7. Jason Hindle

    If true, then someone in China has made a very big mistake

    Because you can wave goodbye to any kind of Chinese hi tech export industry. Which is why it all sounds a bit unlikely to me. The aspersions alone could serve to make China a little poorer.

    1. Jack of Shadows Silver badge

      Re: If true, then someone in China has made a very big mistake

      +1 although if past performance is indicative of future results, there will be little to no effect. NSA shenanigans didn't seem to any sort of downside to, for example, Cisco. With respect to having national chip foundries, it's doable especially given the cost overruns for any sort of military contract. Think of it as national insurance on a par with flood insurance, if you will. It would also have the advantage of allowing custom production runs for national sole use.

  8. FuzzyTheBear

    Critical ? Please come home.

    How can the military give out >>> any <<< defense contract to a foreign hostile nation ?

    Would you trust Russia for nuclear missile guidance systems ? Seems obvious to me .. but it seems that some people have no trouble with it as long as they rake in the dosh. Now .. if the st00pid say " hey it will cost 10 cents less per unit if we subcontract production to China " for critical defense and government infrastructure , China that's proved to be a hostile regime over and over again ( China sea anyone ? Interpol head honcho missing ? ) then those people should be put on trial ( no, can't sue idiots for being idiots .. we'd all be rich by now ) and the cost of replacing the equipment should be taken out their pockets. ( I skipped the part about putting them on trial for being traitors ) Really ANY critical part for ANY system should be homemade. Those who pointed out the NSA in the US doing no better with Cisco kit and the rest , yes that's totally right , they're no better , but i'd rather have the NSA looking over my shoulder than the Chinese , the enemy , having a pass and taking home our trade secrets , and having a switch in my computer allowing them free access without my knowledge. I think that the story is indeed true , if not , highly plausible and that as such this should be a warning to every IT guy in the world not to trust kit for anything important coming out of China. No i dont trust China .. and yes they are the enemy to our economy and security and as such if i can , i avoid anything written China on it. It's a matter of principle , it's a matter of keeping our workers working , our security secure and our way of life alive.

  9. Grinning Bandicoot


    Maybe it is a case of watch my right - keep looking at right hand; meanwhile the left. Or the Chinese government is waging war. Mosquito war annoying but nothing to point to. Drop of blood here, drop of blood there but no real bleeding so no concern. Another consideration is that it it a disinformation ploy by TOGS in preparation for the DEED.

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