Supermicro stock hammered despite denial of Chinese spy attack

Posted on Friday, October 05 2018 @ 10:28 CEST by Thomas De Maesschalck
One of yesterday's major tech news articles concerned the Chinese hardware-based spy attack on US companies. A Bloomberg article claimed Chinese spies managed to infiltrate Supermicro's supply chain with a small microchip the size of a pencil tip, to intrude into the motherboard's Baseboard Management Controller (BMC). The chip reportedly got mounted on Supermicro server motherboards and found its way into datacenters of firms like Amazon and Apple.

At the moment, there's little evidence of this incident, other than the unnamed sources quoted by Bloomberg. Super Micro, Apple, Amazon, and Elemental all issued statements denying the claims:
Super Micro Computer, Inc. (SMCI), a global leader in enterprise computing, storage, networking solutions and green computing technology, strongly refutes reports that servers it sold to customers contained malicious microchips in the motherboards of those systems.

In an article today, it is alleged that Supermicro motherboards sold to certain customers contained malicious chips on its motherboards in 2015. Supermicro has never found any malicious chips, nor been informed by any customer that such chips have been found.

Each company mentioned in the article (Supermicro, Apple, Amazon and Elemental) has issued strong statements denying the claims:

Apple stated on CNBC, “We are deeply disappointed that in their dealings with us, Bloomberg's reporters have not been open to the possibility that they or their sources might be wrong or misinformed. Our best guess is that they are confusing their story with a previously reported 2016 incident in which we discovered an infected driver on a single Supermicro server in one of our labs. That one-time event was determined to be accidental and not a targeted attack against Apple."

Steve Schmidt, Chief Information Security Officer at Amazon Web Services stated, "As we shared with Bloomberg BusinessWeek multiple times over the last couple months, at no time, past or present, have we ever found any issues relating to modified hardware or malicious chips in Supermicro motherboards in any Elemental or Amazon systems.?"

Supermicro has never been contacted by any government agencies either domestic or foreign regarding the alleged claims.

Supermicro takes all security claims very seriously and makes continuous investments in the security capabilities of their products. The manufacture of motherboards in China is not unique to Supermicro and is a standard industry practice. Nearly all systems providers use the same contract manufacturers. Supermicro qualifies and certifies every contract manufacturer and routinely inspects their facilities and processes closely.
Despite the denials, investors seem to be putting more faith in the Bloomberg story. At yesterday's closing bell, Super Micro Computer's stock was down 41.12 percent.

SMCI stock impact


About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.



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