Recently, Korean customs successfully cracked a chip smuggling case worth $11.6 million, involving 53,000 chips, marking the largest scale chip smuggling case on record. According to BusinessKorea, this case involves strategic chips using American technology, transported through South Korean channels to China, drawing widespread attention.
Surprisingly, the mastermind behind the case is not an individual but an entire enterprise named “Company A,” whose executives are suspected of participating in illegal activities for over three years.
From August 2020 to August 2023, “Company A” legally purchased chips produced in the United States and legally imported them into South Korea. Then, some chips were air-shipped to China in 144 batches without declaring them to customs.
Unlike previous attempts to smuggle consumer-grade CPUs and GPUs to China, this smuggling involved chips that convert analog signals to digital signals. These chips have been under export restrictions since 2020 because they could potentially be used in weapons of mass destruction.
Although “Company A” kept written records of the chip purchases, it successfully concealed its illegal plans within its legitimate business, avoiding early suspicion.
“Company A” cleverly confused the situation by over-ordering chips from the official distributors of communication processors, a tactic that allowed the smuggling operation to proceed successfully until it was uncovered months later.
Another aspect of this Korean smuggling operation that drew attention was that, unlike other smuggling cases, all smuggled goods successfully passed through, and the criminal activity was only revealed months later.
While the executives of “Company A” may face serious consequences, the smuggled chips might have been used for purposes still unknown, possibly even involving weapons of mass destruction, a concern for the US government.
Related:
