Security Market Segment LS
Friday, 03 May 2019 11:05

Supermicro ditching Chinese boards due to 'spying fears'

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Supermicro ditching Chinese boards due to 'spying fears' Pixabay

The hardware company at the heart of a Bloomberg story, that claimed its supply chain had been compromised by agents in China in a bid to spy on some customers, is reportedly asking its suppliers to move manufacturing out of Beijing.

A Nikkei report said server maker Supermicro Computer had issued the advice in a bid to address American customers' concerns about the risks of cyber spying. Supermicro earns more than 60% of its revenue in America.

The move appears to be driven more by the trade tensions between the US and China. Last year, Supermicro used Chinese-made motherboards in less than half the 1.55 million servers it shipped, compared to more than 90% in 2017, according to Betty Shyu, a server analyst at Taipei-based Digitimes.

The Bloomberg story, published in April last year, claimed that the supply chain manipulation had been done by implanting chips on mainboards made for it by a Chinese supplier.

The story attracted strong denials from Apple and Amazon, the two companies named as having received servers which had been doctored with in this manner.

It was also denied by the US Department of Homeland Security and the British National Cyber Security Centre.

The Nikkei yarn comes a few days after Supermicro announced that it would expanding its corporate headquarters in San Jose, California, and also breaking ground on a new 800,000-square-foot building in Taiwan.

Supermicro has seen its server sales fall since October last year and has forecast a drop of about 10% in revenue for the January to March quarter, compared to the previous three months.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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