510,000 CPUs, HDDs and more seized as smugglers try to smuggle tech into China – Ars Technica

The recent chip shortage has shown us just how far people will go to find rare components and gadgets. Those who couldn’t wait for new electronics battled exorbitant price tags, frustrating lottery systems, questionable sellers, and unreliable stocks. But just as people go to extremes to buy technology, extreme measures can be taken to sell them.

In the year By 2023, the gray market for PC components, CPUs, SSDs and HDDs, and devices such as phones and computers in mainland China appears to be thriving. Just ask customs agents in China and Hong Kong, who are announcing seizures after seizures of tech hardware, including a batch valued at $3.8 million on Monday.

510,000 electronic devices were seized

Hong Kong Customs announced that it has seized 508,000 PC parts, including CPUs, computer hard drives and RAM sticks, with an estimated market value of $3.5 million. There are also 2,000 electronic devices such as laptops, phones, dash cams and touchscreen styluses, valued at $255,000.

Customs agents found the gear during an inspection of a container truck at the Man Came To checkpoint. Hong Kong Customs said it had arrested a 61-year-old male truck driver “suspected to be involved in the case”.

“Electronic products are believed to have been sent to the mainland for resale or reassembly,” said Wong Chi Man, senior inspector at Hong Kong Customs’ Cargo and Vehicle Processing Division, according to Hong Kong’s The Standard.

“Customs will continue to crack down on cross-border smuggling activities with strong enforcement action based on risk assessment and data analysis,” Hong Kong Customs said in a statement on Wednesday.

Violators face up to $2 million in fines and up to seven years in prison, according to the notice.

sticky situation

A week and a half ago, Chinese customs made their own fists with 239 CPUs wrapped in tape around a man’s thighs and stomach. Based on images released by Customs (which you can see on Chinese publication MyDrivers’ website), the batch includes current-gen Intel Core i5-13400F consumer CPUs.

Customs detailed the incident on WeChat, MyDrivers reported. According to Google’s MyDrivers article, the suspected smuggler entered the country through the customs’ no declaration channel at the passenger control hall of Gongbei Port. And because it seemed unusual, it was intercepted for investigation.

It is said that Macau, where the port of Gongbei is located, has become a popular gateway for moving products to China.

Scooters and silicone

If you haven’t been following the technology smuggling bus, you might think that stuffing your body with computer chips sounds like a big deal. But you don’t have to go back too far to find more wild hardware smuggling attempts into China.

On March 17, China Customs said via WeChat (as seen by Tom Hardware) that 84 Kingston NVMe SSDs were seized inside an e-scooter.

Customs agents found at the Zhuhai Macau Cross-Border Industrial Zone thought it was strange that the man was trying to bring in the e-scooter through a “non-declaration channel”. An X-ray machine revealed that there was something hidden in the bumper of the electronic scooter. After some disassembly, Customs found the SSDs stuck together in the scooter’s axle tube.

One woman may have thought her smuggling strategy was unacceptable, as she was five to six months pregnant when she tried to sneak 202 CPUs and nine phones into China from Macau using a silicon stomach. However, the woman attracted the attention of MyDrivers, (where you can see a video of the woman in question), for looking too big (a bold accusation) and for walking in a strange way. Hardware images packed into the fake belly include 12th Gen Intel “Alder Lake” desktop CPUs.

The list goes on in China; Another example involved the seizure of 160 CPUs and 16 flip phones, again framed on contraband, and an attempt to move $3 million worth of AMD graphics cards.

Hong Kong customs got off to an impressive start to the year, reportedly seizing 400 smartphones worth a fortune. In February alone, that’s $509,556 and 40 phones worth about $35,000.

But that doesn’t mean 2022 wasn’t an event.

Last year, Hong Kong customs said it stopped a truck illegally transporting 856 game consoles worth $1.3 million. Based on the images, they look like Nintendo switches but they were. They are known as integrated circuits, capacitors, timers and diodes.

Hong Kong customs seized about $20.3 million worth of GPUs, SSDs, integrated circuits, memory cards, speakers and other audio equipment from a river merchant ship in May. The customs also stated that the boat was heading to mainland China waters.

“As the epidemic is slowly receding and sea freight is returning to normal, it has been observed by the Customs that criminals are taking advantage of the opportunity to engage in smuggling activities using river trade vessels. They also announced that low-value items are being seized to avoid detection by law enforcement officers.” Hong Kong Customs said at the time.

China’s gray market

The above incidents show smugglers trying to bring products into mainland China being intercepted by customs in China or Hong Kong. It is not clear who these smugglers are working for, how they got in, or what their true intentions are with the allegedly smuggled product. Those arrested have not released an official statement.

But as stated Bloomberg Semiconductor gray market in China in December It will appear in 2020 due to global chip shortages. The market’s importance has grown since the US imposed a ban on exports of various semiconductors to China, particularly those that could be used by the military.

The various technologies that have recently been seized by customs are not restricted by sanctions, but sometimes only to save money on import prices.

“China’s vast gray market consists of hundreds of brokers and is crowded with second-hand or obsolete chips that can fetch up to 500 times their original price,” Bloomberg said, noting that the iPhone is also a target for smuggling. China: “Because from Hong Kong and Macao, because of import duties, they are very expensive there. Smugglers occasionally seize dozens of weapons at the border.”

Although the price and availability of electronics have improved in some geographies, China’s gray tech hardware market doesn’t seem to be dying any time soon. And it’s clear that there are people willing to take big risks to feed that market, whether it’s using fake cars or faking pregnancies.