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The cost of a batch of 53,000 chips exceeds $12 million – the largest in cost uncovered smuggling operation so far.
Illegal American chips were sent to China through a South Korean company until the contraband was discovered by local customs authorities. The operation was so massive that behind it was not an individual, but an entire enterprise, known in the report as “Company A”.
The prosecutor's office has already charged the leaders with a crime that was likely committed over three years: from August 2020 to August 2023. “Company A” legally purchased chips made in the United States – but in larger quantities than required – and flew them from South Korea to China on 144 separate flights, simply without declaring them to customs.
The operation involved chips designed to convert analog signals to digital, and since they could possibly be used for weapons of mass destruction, they are subject to export and import restrictions as of 2020.
To date, the smuggling operation is the largest yet uncovered in terms of value and likely quantity. The previous record holder was an attempt to illegally transport processors, solid-state drives and other electronics worth $4 million from Hong Kong to China.
At the same time, the current operation is different in that all the goods were successfully transported, and the crime was discovered only a few months later. While the CEO and executives of “Company A” will likely face serious consequences, the chips could be used for as yet unknown purposes – possibly including weapons of mass destruction, as the US government fears.
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It was previously reported that, amid sanctions, China will direct $40 billion to chip production, and Huawei is already building a shadow production network throughout the country.
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