Motherboard maker Super Micro is moving production away from China to avoid spying rumors

Greg S

TS Evangelist

Last October Bloomberg published a report claiming that minuscule spy chips were planted on Super Micro motherboards through a supply chain infiltration. Heavy weight players using the server motherboards include Apple and Amazon, both of which found no evidence of such claims.

Even though there has been no evidence found in independent investigations to date, Super Micro is now moving their production out of China to make its customers happy. As a result of the alleged spy chips, Super Micro has faced difficulty making sales to select US customers and those with ties to government.

Unsurprisingly, China used to have a stronghold on production of server-grade components. In 2017, nearly 90 percent of the 13.9 million server motherboards produced were from the red nation. In 2018, that number drastically fell to just 50 percent of the 15.2 million boards produced globally.

Aside from asking partners to relocate, Super Micro is also building out its own production capabilities. The goal of internal expansion is to eliminate the perception of susceptibility to any future attacks. Most of Super Micro's internal manufacturing facilities handle assembly of servers, while contract manufacturers are often handling assembly of motherboards. Rising tariffs are also another reason for Super Micro to move operations.

Expansions include a new $65 million factory in northern Taiwan, located in the city of Taoyuan. There are also planned expansions within Silicon Valley, although specific details have not yet been shared.

After all of the negative press Super Micro has received as a result of the Bloomberg report, the company's sales have fallen nearly 10 percent during the first quarter. There is also a strong possibility that Super Micro will slide from the third largest server maker to the fourth slot.

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grumblguts

TS Addict
Industrial espionage from china is all over the world,
seeing the UK think its ok for Huawei to build 5G network is pure insanity I just dont understand their reasoning to allow them.
Hell they are even allowing china build a nuclear power station they can use to blackmail us from a leak.
World is just crazy.
 

dj2017

TS Maniac
Industrial espionage from china is all over the world,
seeing the UK think its ok for Huawei to build 5G network is pure insanity I just dont understand their reasoning to allow them.
Hell they are even allowing china build a nuclear power station they can use to blackmail us from a leak.
World is just crazy.
There are only speculations about China spying. Probably some fake news also. Just excuses to push a specific agenda. And that agenda is to stop sending more money and "know how" to China, because China could become the major power in a few decades, taking US's place. This is a very valid fear and a very understandable agenda.

On the other hand there where proofs that US was spying European corporations and European leaders. Have you seen all that drama? No. because US and Europe will gain more by staying allies than start pointing fingers at each other.
 

IAMTHESTIG

TS Evangelist
Hope they are able to keep making quality boards for years to come... I've found their server boards to be very reliable, and even a little better than the Dell server boards - at least the limited number of them that I've been exposed to.
 

Kashim

TS Addict
I live in Canada and if you walk into any store here you will find 90%+ of the items are made in China. Most of it poor quality. I have nothing against China or Chinese people, but this can't go on forever. It doesn't take a genius to know something is very wrong when you have to go out of your way to try and find something in a store that is NOT made in China. On the other hand, I do feel bad for some companies like Super Micro who make great products and get caught in the middle.
 

Mouldy CPU

TS Enthusiast
Industrial espionage from china is all over the world,
seeing the UK think its ok for Huawei to build 5G network is pure insanity I just dont understand their reasoning to allow them.
Back in the 18th century, the United States conducted industrial espionage to catch up with Europe. Germany and the UK never stopped barking at the US for that. This game of accusing an emerging contender of espionage is so old, I'm only surprised that people still fall for it.

And Snowden revealed back in 2014 that the US was conducting industrial espionage against companies that competed with US firms. So no matter whose product your telco end up using, you'd still be susceptible to spying by a foreign government.

Trust me, everybody plays dirty in politics and espionage is the norm. There's hardly news here to people that pay some attention to international politics.

Industrial/economic espionage is nothing new either. Pretty much every industrialized nation has conducted industrial espionage in many forms. See this for a brief overview.
 
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vincentyu

TS Booster
I live in Canada and if you walk into any store here you will find 90%+ of the items are made in China. Most of it poor quality. I have nothing against China or Chinese people, but this can't go on forever. It doesn't take a genius to know something is very wrong when you have to go out of your way to try and find something in a store that is NOT made in China. On the other hand, I do feel bad for some companies like Super Micro who make great products and get caught in the middle.
You get what you paid for, be prepared to pay more!
 
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Knot Schure

TS Addict
I live in Canada and if you walk into any store here you will find 90%+ of the items are made in China. Most of it poor quality. I have nothing against China or Chinese people, but this can't go on forever. It doesn't take a genius to know something is very wrong when you have to go out of your way to try and find something in a store that is NOT made in China. On the other hand, I do feel bad for some companies like Super Micro who make great products and get caught in the middle.
You get what you paid for, be prepared to pay more!
And pay, I happily will.