Arrests Made in Chip Re-Marking Case

Taiwanese police arrested several suspects and seized an unspecified number of re-marked Advanced Micro Devices processors in a December 30 raid on four businesses at several locations in Taiwan, an AMD spokeswoman said today.

Re-marked processors are chips that have been illegally re-labelled as a more valuable chip, such as one offering more on-chip cache or a higher clock speed. Re-marked chips are intended to be sold at a premium to unsuspecting users, who may find themselves with a defective processor or one that does not perform to the expected specifications.

AMD spokeswoman Catherine Abbinanti declined to reveal specific details of the raid in Taiwan, including the exact number of processors seized by authorities, citing security reasons. But she said numerous media reports that had estimated the volume and value of processors seized were "unsubstantiated and without merit."

Sixty Thousand Chips Found

On January 1, the Liberty Times newspaper published a photograph on its Web site of 11 cardboard shipping boxes that contained re-marked processors seized by police in Taipei. Citing a police source, the newspaper reported that a total of 60,000 re-marked chips with an estimated retail value of $9.4 million were seized in a raid on December 31.

The newspaper also reported investigators believe that more than 1 million re-marked AMD chips may have been shipped overseas to Germany, China, and other countries. However, a spokesman for AMD Germany said Tuesday that the company had contacted its distributors and resellers in Germany and found no evidence that re-marked processors had entered that country from Taiwan.

The police raid in Taiwan follows a similar operation conducted by Thai authorities in November of last year, Abbinanti said. That raid was aimed at local distributors who were either suspected of re-marking chips or selling re-marked chips, she said.