“Electronics produced in China may be viewed unsafe due to this news, and tech shares are falling in general because of that.” – Ray K W Kwok, an analyst at CGS-CIMB Securities Hong Kong Ltd.
MORRISVILLE – Shares in Lenovo Group and ZTE Corp tumbled in Hong Kong on Friday following a news report Chinese spies might have used chips supplied by another company to hack into U.S. computer systems.
Lenovo shares closed down 15.1 percent while ZTE lost 11 percent. At one point, Lenovo shares fell 23 percent – “its biggest loss in almost a decade,” Bloomberg News reported.
On Thursday, Bloomberg had cited unidentified U.S. officials as saying malicious chips were inserted into equipment supplied by Super Micro Computer Inc. to American companies and government agencies.
“Electronics produced in China may be viewed unsafe due to this news, and tech shares are falling in general because of that,” Ray K W Kwok, an analyst at CGS-CIMB Securities Hong Kong Ltd., told Bloomberg.
Lenovo, with headquarters in Beijing and Morrisville, is the biggest global manufacturer of personal computers and has a growing brand of servers. The server group is based in Research Triangle Park. Lenovo shares are traded in Hong Kong.
“Super Micro is not a supplier to Lenovo in any capacity,” said Lenovo in a statement. “Furthermore, as a global company we take extensive steps to protect the ongoing integrity of our supply chain.”
A spokeswoman for ZTE, headquartered in Shenzhen in southern China, said she wasn’t aware of the report.
The Chinese foreign ministry didn’t respond to a request for comment.
Bloomberg said Chinese military operatives added components to Super Micro products made at factories in China. It said the components included code that caused the products to accept changes to their software and to connect to outside computers.
Super Micro, headquartered in San Jose, California, denied its products contained malicious chips.
“Supermicro has never found any malicious chips, nor been informed by any customer that such chips have been found,” said a company statement.
Also, Apple and Amazon “denied claims that a secret microchip was found embedded in severs linked to Elemental Technologies, a video compressing service purchased by Amazon in 2015,” The Street reported.
“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,” Apple said in a statement to Bloomberg that was also cited at The Street. “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 Super Micro server in one of our labs.”
Chinese tech companies face heightened scrutiny in the United States.
A 2012 report by a congressional panel said ZTE and Chinese rival Huawei Technology Ltd. were security risks and warned American telecoms companies not to buy their equipment.
ZTE faced possible bankruptcy this year after Washington imposed a seven-year ban on sales of U.S. technology to the company over its exports to Iran and North Korea. American authorities lifted the ban in July after ZTE paid a $1 billion fine, agreed to replace its executive team and hired U.S.-selected compliance officers.
