Bloomberg Topic: The Big Hack: How China Used a Tiny Chip to Infiltrate U.S. Companies

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For those here who aren't nerds:
Virtually ALL motherboards [the core board] for general-purpose single-user ["personal"] and server [central storage] computers and most of the specialized peripheral boards [network controllers, video controllers, storage controllers, etc] in the world are made in the mis-named Peoples Republic of China today, mostly using parts also made there.
They are made in a few factories in Shenzhen for the small number of nominal manufacturers, most of them based in Taiwan: Gigabyte, ASUS, ASRock, MSI, Tyan, Dell,
Supermicro.
Supermicro, headquartered in California, is the gold standard as far as servers go, though servers from Dell, headquartered in Texas, are popular in businesses. But Dell, and even Supermicro now, source their boards from those factories in the PRC. Which is how the PRC has cracked (not hacked) into the top layer of US government and industry, as disclosed by the Bloomberg article.
General-purpose computers are used everywhere in the computerized world, from the most important government offices down to your desktop and mine. They cannot be done away with, nor can they be sourced from outside China since there are no other sources -- Capitalism's relentless drive for profit über alles has shut down all other sources.
One of the effects not discussed in the Bloomberg article is poor quality. If kept cool by fans, there is no reason for a well-made motherboard not to have a lifespan longer than the technology used in it, remaining in service for 5-10 years or more, eventually being replaced only because of having become completely obsolete.
But since all motherboard manufacturing was moved from Taiwan to Shenzhen, their lifespan has now dropped to 2-3 years at most, and since the Shenzhen factories don't do quality control, sometimes to 2-3 months. This increases costs to us by a factor of 2 or more, not even counting the value of lost time which is substantial.
Since Chinese ethics are based largely on maintaining the appearance of probity ("face", miànzi) rather than probity itself, where does that leave us? And how do we escape? (for cultural contrasts see home dot ubalt dot edu/ntsbpitt/ethics dot pdf )
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The attack by Chinese spies reached almost 30 U.S. companies, including Amazon and Apple, by compromising America’s technology supply chain, according to extensive interviews with government and corporate sources.
By Jordan Robinson and Michael Riley

In 2015, Amazon.com Inc. began quietly evaluating a startup called Elemental Technologies, a potential acquisition to help with a major expansion of its streaming video service, known today as Amazon Prime Video. Based in Portland, Ore., Elemental made software for compressing massive video files and formatting them for different devices. Its technology had helped stream the Olympic Games online, communicate with the International Space Station, and funnel drone footage to the Central Intelligence Agency. Elemental’s national security contracts weren’t the main reason for the proposed acquisition, but they fit nicely with Amazon’s government businesses, such as the highly secure cloud that Amazon Web Services (AWS) was building for the CIA.
To help with due diligence, AWS, which was overseeing the prospective acquisition, hired a third-party company to scrutinize Elemental’s security, according to one person familiar with the process. The first pass uncovered troubling issues, prompting AWS to take a closer look at Elemental’s main product: the expensive servers that customers installed in their networks to handle the video compression. These servers were assembled for Elemental by Super Micro Computer Inc., a San Jose-based company (commonly known as Supermicro) that’s also one of the world’s biggest suppliers of server motherboards, the fiberglass-mounted clusters of chips and capacitors that act as the neurons of data centers large and small. In late spring of 2015, Elemental’s staff boxed up several servers and sent them to Ontario, Canada, for the third-party security company to test, the person says.

Read more at https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies









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