China Spy Chips In U.S. Hardware: 3 Security Stocks In Focus -

China Spy Chips In U.S. Hardware: 3 Security Stocks In Focus

Oct 09, 2018Jeremy ParkinsonFinance, No picture0

An alarming Bloomberg BusinessWeek report last week claiming that major American corporate giants were under the Chinese government’s surveillance via a minute chip implanted in U.S. hardware, took the country by storm. The companies facing the heat directly are none other than Apple (AAPL – Free Report) and Amazon (AMZN – Free Report). The data center equipment of these giants are at the center of the hack.

The report comes hardly two weeks after Facebook (FB – Free Report) reported a cyber-attack on its system that compromised more than 50 million accounts worldwide. This isn’t the first attack on a major American technology company this year; Expedia’s (EXP – Free Report) Orbitz and Under Armour’s (UAA – Free Report) MyFitnessPal app faced cybersecurity threats as well.

But the damage caused by a possible security breach through Chinese spy chips infiltrated in U.S. hardware matches nothing in terms of scale and gravity. The graveness of the matter is reflected by the companies that formed the base of the attack, indicating that no technology giant is immune to cyber threats.

Therefore, it would be a good idea to add a few cybersecurity stocks to your watch list, as this segment has become a necessity to tackle serious data breaches.

How Does a Miniscule Chinese Spy Chip Affect You?

American technology giants’ low-cost solution to manufacture and assemble equipment overseas has formulated a problem too big to counter right away. The cost-effective global supply chain that helps Amazon and Apple fabricate and put their hardware together demands a closer look, as the Chinese government’s snuck tiny spy chips into equipment processed in China.

Super Micro, a San Jose-based component provider that assembled equipment for Elemental, Amazon and Apple’s hardware supplier, had its equipment infiltrated with Chinese spy chips, the Bloomberg report cited. Amazon, Apple, and Super Micro denied allegations made in the report, with Homeland Security saying, “it has no reason to doubt” the statements issued by the concerned companies.