The US-China trade war just got nastier

The presence of a stealth chip in the motherboard design of secure servers used by the CIA has just made US's hand stronger

The presence of a stealth chip in the motherboard design of secure servers used by the CIA has just made US's hand stronger
The presence of a stealth chip in the motherboard design of secure servers used by the CIA has just made US's hand stronger

If any conclusions can be drawn from the testy speech that the United States Vice-President Mike Pence gave today, it is that what Russia has been doing in the US elections is child’s play compared to what China has been up to[1].

The Vice President accused China of undue influence in US, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests.

Pence accused China of spying on its own students studying in the US universities, promoting some with scholarships while denying others, watching what they said and wrote.

“Beijing has mobilized covert actors, front groups, and propaganda outlets to shift Americans’ perception of Chinese policies,” he said. “What the Russians are doing pales in comparison to what China is doing across this country,” he added, referring to Russian state-sponsored hacking and online influence campaigns.

Listing the several ways by which China has angered the United States, Pence said China was[2]:

These are serious allegations. And there is more…

Trump vows to impose penalties on all imports from China

Trump tweeted that China has been taking advantage of the United States on Trade for many years and that he was going to retaliate fast against them if they continue to match duties on imports from the US. Thus far $250 billion of imports from China are being levied duties.

His comments, made aboard Air Force One on his way to Fargo, N.D., signal that the trade dispute with China is unlikely to reach a quick resolution any time soon[3].

Mr. Trump added: “And I hate to say that, but behind that, there’s another $267 billion ready to go on short notice if I want. That totally changes the equation.”

China’s tiny chip that infiltrated US servers

Bloomberg Businessweek has just published in its latest issue the story of how China used a tiny chip to infiltrate America’s top companies[4]. As to how this was accomplished, we need to take a small detour…

It started in 2015. Amazon was looking to acquire a software company Elemental Technologies, a software firm that created software for compressing massive video files and formatting them for different devices (think iPhone, iPad, Android, Laptop etc.). Elemental also supplied to the Central Intelligence Agency (CIA) and this dovetailed nicely with Amazon’s secure offerings of AWS (Amazon Web Services) for the CIA.

While doing due diligence, AWS hired a third-party to look into the security aspects of Elemental’s software and it uncovered some troubling issues. Elementals’s product ran typically on servers built by a San Jose based company, Super Micro Computer Inc. On the server motherboards, the testers discovered a tiny chip, no more than the size of a grain of rice. This chip was not part of the original design of the motherboard. It was inserted at manufacturing time by the subcontractors of Super Micro in China.

A tiny chip that was used to infiltrate big US companies
A tiny chip that was used to infiltrate big US companies

Worse, this chip created a stealth entry for the hackers into any network that connected with these servers. Once connected any data could be lifted out of it. It must be kept in mind that hardware hacks, such as this one are much harder to design and can have devastating consequences. No wonder, US is breathing down China’s neck.

This is not new. Many chip manufacturers who fabricated their silicon in China have for long suspected that a secret piece of silicon was being added in to the die to enable such chips to “call home” when activated. This is even harder to detect as the chip manufacturers only know their design at a high-level language such as VHDL or Verilog.


So how is this going to play out? It is now evident that China has been caught by the US with its hand in the cookie jar. With Trump paranoid about November 2018 elections being handed to the Democrats (after all what goes around, comes around!) the tough talk between the two biggest economies in the world is not going to die down any time soon. Stay tuned.


[1] Mike Pence’s tirade against China went way beyond tradeOct 4, 2018, Quartz

[2] Pence says US “will not back down” from China’s aggression in fiery speechOct 4, 2018,

[3] Trump Threatens Tariffs on All Imports From China, Escalating Trade FeudSep 7, 2018, New York Times

[4] The Big HackOct 8, 2018, Bloomberg Businessweek

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An inventor and out-of-the-box thinker, Sree Iyer has 37 patents in the areas of Hardware, Software, Encryption and Systems.

His first book NDTV Frauds has been published and is an Amazon Bestseller.It ranked second among all eBooks that were self-published in 2017.

His second book, The Gist of GSTN which too is available on Amazon as an e-Book and as a paperback.

His third book, The Rise and Fall of AAP is also available in print version or as an e-Book on Amazon.

His fourth book, C-Company just released to rave reviews and can be bought as a print version or as an e-Book on Amazon.
Sree Iyer
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  1. This ought to provide the Make in India program a much needed fillip. Time to attract US manufacturers to shift their manufacturing to India.

  2. The Chinese do have agenda of World colonisation. All the chink bonhomie is just a mask. Beware world, it is worse than even imagined.

  3. One shudders to think how many such spy chips are sitting in the computers of Indian corporations, Govt bureaucracy and clandestine services, snooping constantly!


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