China used tiny chips on U.S. computers to steal secrets

Chinese spying microchips found in Apple, Amazon computers: report

Bloomberg Businessweek reported Thursday that Chinese spies exploited vulnerabilities in the US technology supply chain to infiltrate computer networks of nearly 30 USA companies, including Amazon.com Inc., Apple Inc., a major bank and government contractors.

Supermicro, according to Bloomberg, also manufactured equipment for Department of Defense data centers, the CIA's drone operations, and onboard networks of Navy warships.

The Bloomberg News report said the chips, the size of a grain of rice, were used on equipment made for Amazon, which first alerted USA authorities, and Apple, and possibly for other companies and government agencies. One US official who said Thursday morning that the thrust of the article was true later expressed uncertainty about that conclusion. The company explains that it conducted "rigorous internal investigations" each time it was contacted by the publication, and that it never found anything substantiating the claims.

Ninety percent of the world's personal computers are made in China. A U.S. National Security Agency spokeswoman said she had no immediate comment.

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The idea that China has been installing mini-spies into American electronics has always been a fear of the American intelligence community, as the US's New Cold War adversary produces most of the gadgets used in the West.

Citing unnamed United States officials, Bloomberg said a unit of the People's Liberation Army were involved in the operation that placed the chips on equipment manufactured in China for US-based Super Micro Computer Inc.

The company is American, but the motherboards were assembled mainly in China.

Shares of Chinese hardware companies fell sharply on Friday, led by computer maker Lenovo Group Ltd which lost more than a fifth of its value.

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According to Bloomberg, Apple discovered the malicious chips three years ago in hardware supplied by motherboard specialist Super Micro. "Apple has never found malicious chips in our servers".

"Our best guess is that they are confusing their story with a previously reported 2016 incident in which we discovered an infected driver on a single Super Micro server in one of our labs", Apple said of the Bloomberg report.

The report said that a unit of the Chinese People's Liberation Army infiltrated the supply chain of computer hardware maker Super Micro Computer Inc SMCI.PK to plant malicious chips that could be used to steal corporate and government secrets.

"But I will say the Chinese efforts to threaten us in cyberspace and across the information technology spectrum are a very high priority for us - countering them, establishing structures of deterrence to prevent China from even thinking about doing it, touches on the offensive cyber operations that the president has authorized", Bolton said.

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"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", Supermicro said in a statement.

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