Nintendo released a statement on its website regarding the use of mod chips:
Perhaps you are not familiar with mod chips, but nevertheless we would like to draw your attention to some important information.
Modification microchips (mod chips) circumvent the security embedded into Nintendo's products. To install a mod chip into a Nintendo hardware system, it is necessary to dismantle the product and, in some instances, remove components.
The use of mod chips voids the manufacturer's warranty. In addition, the installation of a mod chip can damage the functionality of a Nintendo console, sometimes rendering it incapable of repair. Mod chips have been adjudicated to be illegal in various countries around the world, including the Unites States, the United Kingdom and Hong Kong. Most European countries have also already adopted laws prohibiting the circumvention of technological measures for copyright protection. People caught installing or selling mod chips may be subject to criminal charges.