South Korea's customs office announced that it had uncovered a major smuggling operation involving 53,000 chips worth $11.6 million in recent days, making it the largest chip smuggling event to date, according to a report in BusinessKorea.
According to the publication, one of the main smuggling routes for "strategic chips with American technology" (such as Nvidia's artificial intelligence chips) goes through South Korea, and from there China.
Moreover, it turned out that the smuggling operation was so massive that an entire company, known only as "Company A", was behind it for three years.
This event joins China's continued efforts to get its hands on Western technology.
A sophisticated, but simple, smuggling route
From August 2020 to August 2023, "Company A" legally bought US-made chips and imported them, also legally, into South Korea. After that, some of those chips were smuggled into China on 144 different flights, simply by not declaring them to customs.
" "Company A" acted in a very sophisticated manner also with regard to the supposedly legal purchase of the chips, using the cover of a legitimate business - the company simply ordered more chips than it actually needed from the official distributors, and smuggled only a part of them. If all the chips were smuggled, it would be alarming suspicions much earlier.
Chinese Foreign Minister Wang Yi.
Beijing spares no means to obtain Western technology. Photo: GettyImages
The main difference in this South Korean smuggling operation compared to others, which occur on a regular basis, is that all the goods were successfully smuggled, and the crime was not discovered months after it was over, according to the report.
While the CEO and managers of "Company A" are expected to face serious consequences, it can be assumed that the smuggled chips are already being used for various strategic Chinese purposes. It should be noted that one of the USA's greatest concerns is that China will use the technology for the benefit of a military buildup that will endanger the world.
A closer look at Nvidia's supercomputer in Israel.
China also wants these. Photo: Nvidia
About two weeks ago, it was reported that Chinese military bodies, state-run artificial intelligence research institutes and small universities, purchased semiconductors from the Nvidia company over the past year, even though their export to China was banned by the US.
Among those chips that reached Chinese hands are the A100 and the more powerful H100 chip, whose export to China and Hong Kong was banned in September 2022, as well as the slower A800 and H800 chips that Nvidia developed for the Chinese market, but were also banned for export Last October.
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