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AMD Warns About Counterfeit Chips

UPDATED: AMD is warning customers of potentially mislabeled PC and server chips after helping foil a counterfeit ring in Taiwan.

As previously reported, the company alerted authorities to a problem in Taipei late last month. Raids at four sites led to multiple arrests for "re-marking" or reselling re-marked AMD Athlon, Athlon XP and Opteron processors.

Re-marked processors have been tampered with and may have been illegally re-labeled with inaccurate frequencies, model numbers, or both.

The problem of re-marking has been around for years and the grey market that produces these kind of processors has always been a bit shady, according to Kevin Krewell, a principal analyst for industry research group In-Stat/MDR.

"AMD has had this problem since the days when people re-marked 486 processors to higher clock speeds," Krewell told internetnews.com. "Intel had similar problems as well in the past. Intel began using holographic markings to Pentium II/III processors - in the old Slot 1 module - in an attempt to control re-marking."

AMD spokeswoman Catherine Abbinanti declined to comment on the number of chips confiscated or their value but said AMD has been in contact with a large number of its distributors. AMD implemented several new security measures in mid-2003 to prevent such fraud.

"We strongly recommend consumers and businesses buy AMD processors only from authorized distributors and certified resellers." Abbinanti told internetnews.com

Abbinanti also noted that the counterfeit ring was not likely dealing with the company's Geode or Alchemy product lines. She also rejected earlier press reports suggesting that chips ended up in the European market.

AMD said customers can identify genuine AMD products by a so-called "Processor-in-a-Box" sticker. The label, which has been in place since 2003, includes a unique serial number and a 3-D hologram used for tracking, distribution, authenticity and warranty service.

If there are still questions about the authenticity of an AMD product, Abbinanti said customers should contact their regional AMD sales office.

This is the third time in less than two years that AMD has responded to illegal re-mark operations. The situation came to a head in the Philippines in 2003, which prompted the Processor-in-a-Box sticker. Even as late as November 2004, the chipmaker helped authorities raid various shops in Bangkok. That sting seized more than 200 counterfeit AMD packages, approximately 4,000 counterfeit warranty stickers as well as more than 4,000 fake AMD labels for AMD Athlon 64 FX, AMD Athlon 64 and AMD Sempron processors.

When asked if the company is suffering from a bad link in the supply chain, AMD commented that the counterfeiters purchased their chips from non-authorized sources.

AMD said it has only three authorized distributors in Southeast Asia: Avnet Asia, Intraco Technology and VST Distribution, all based in Singapore.