Police bust chip counterfeiting outfit in China, fakes may have made it into PC hardware — GPUs, motherboards, and power supplies potentially impacted by fake Infineon and TI power chips

Shenzhen authorities have dismantled a counterfeit chip operation that allegedly sold reclaimed and rebranded integrated circuits as premium imports from Infineon, Texas Instruments, and other Western semiconductor firms. According to reporting by the South China Morning Post, police spent four months investigating the ring, which resurfaced discarded chips, laser-polished their markings, and re-labeled them with high-spec part numbers before distributing them through shell companies posing as foreign agents.

At least one arrest has been made, and officials say they’ve begun coordinating with international suppliers to trace affected batches. The SCMP attributes the original tipoff to China’s Rule-of-Law Daily, which claims the chips were targeted at downstream industries, including automotive and industrial control.

Infineon’s power MOSFETs and driver ICs, alongside Texas Instruments’ power controllers and op-amps, are common components in consumer graphics cards, motherboards, and power supply units, sitting at the heart of everything from voltage regulation modules and thermal management. In other words, precisely the kind of devices where a subtle defect is unlikely to surface until the system is under thermal or electrical stress.

Counterfeit chips rarely fail spectacularly out of the box. The danger is that they work just well enough to pass inspection, only to cause intermittent reboots under GPU boost, erratic fan curves, or coil whine that starts weeks after build. A swapped TI buck regulator or mislabelled Infineon MOSFET could explain failures that otherwise defy diagnosis.

If this sounds familiar, it should. In a previous sting operation, Chinese authorities seized over 40,000 fake Nvidia GPUs relabeled and sold as newer models. But while GPU scams tend to target uninformed consumers, this case is more structurally dangerous. The chips were allegedly sold B2B to downstream suppliers, meaning legitimate brands could unknowingly integrate counterfeits into otherwise reputable components.

China’s tightening grip on chip imports under ongoing US export controls is part of the backdrop, with some domestic buyers having to turn to counterfeit imports after finding it difficult to source parts from Europe and the US, creating an artificial premium for “genuine” branded ICs.

In September, China’s Ministry of Commerce began an anti-dumping investigation into imported American analog chips, claiming that US chip suppliers had lowered and suppressed the sale prices of Chinese products over several years. Meanwhile, authorities in the US had, according to Reuters, put location-tracking devices in advanced chip shipments at risk of diversion to China. In the same month, US authorities arrested two Chinese nationals suspected of sending millions of dollars’ worth of Nvidia chips to China.

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