Bottom line: A Bloomberg report on Chinese government spying microchips in hardware used by Apple, Amazon and others may be flawed, but highlights the potential for such spying due to China’s important place in the global supply chain.

As I return to blogging after a couple weeks absence, I wanted to weigh in on an explosive story that ran last week in Bloomberg about tiny spying chips that had been secretly loaded by China’s military onto globally used motherboards. Quite a bit has happened since the original story’s publication (English article), which said that tiny custom-made chips developed by the People’s Liberation Army had secretly been installed into motherboards assembled in China by US hardware maker Supermicro (OTC: SMCI).
The story, which went out of its way to quote quite a few unnamed sources to bolster its credibility, went on to say that those motherboards had been used in servers used by a wide range of companies and government agencies, including Apple (Nasdaq: AAPL) and Amazon (Nasdaq: AMZN). Everyone initially applauded the ground-breaking report, which appeared to show how China could easily insert itself into the global high-tech complex by taking advantage of its important place in the hardware supply chain. Read Full Post…