Retailer acknowledges shipping fake Intel chips

SAN FRANCISCO—An online retailer acknowledged Monday (March 8) that it unwittingly shipped counterfeit ICs to some customers who ordered Intel Corp.'s Core i7-920 microprocessors.

The retailer, Newegg.com, said it terminated its relationship with the supplier that provided the devices, identified as wholesaler Ipex Infotech Inc. Newegg said the supplier originally said it had mistakenly sent Newegg "demo units," but that the company later discovered that the chips were counterfeit. Newegg said it is conducting a full investigation into the incident.

The incidents of counterfeit Core i7 920s were reported Monday by several publications, including the Wall Street Journal and PC Magazine. A number of people who ordered the chips instead received crude knock offs, described as a piece of plastic that resembled a chip, according to the Wall Street Journal report.

The counterfeiting of electronic components has been on the rise in recent years despite increased efforts at corporate and governmental levels to fight the crime, according to a report released last month by the U.S. Bureau of Industry and Security. The report described the counterfeiting of ICs as a threat to the health of the industry supply chain and recommended several steps for fighting counterfeiting.

Newegg (Whittier, Calif.) said it top priority is to proactively reach out to all customers who were affected to ensure their absolute satisfaction. The company said it has already sent out a number of replacement units.
Dylan McGrath(03/08/2010 8:32 PM EST)

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