Individual smuggling attempts in China on PC hardware have hit close to $4 Million US in reported cases from over two years. These are just the reported cases and the amount of smuggled PCs and hardware can be much more than that.
Between crypto crazes and China's lack of PC hardware import and export support, smuggling cases are becoming more commonplace in various borders within the country
Over the last few years, including the sudden influx this month, we have reported several smuggling attempts in China of users attempting to pass through each region's customs, only to be stopped and detained, which then leads officials to an investigation where they have discovered hidden compartments full of PC components and more. We thought it would be interesting to look at the last few years of stories and one that flew under our radar recently and try to analyze the situations and even the total dollar amount since the first case in April 2021.
When we first covered customs officials' cases in the China region, it was during a time when cryptocurrency was at its peak. GPUs, especially ones based on NVIDIA's graphics card designs, were in high demand for their superior capability to mine crypto. NVIDIA had a specific GPU designed for mining called the NVIDIA CMP 30HX.
The NVIDIA CMP 30HX, 40HX, and 50HX GPUs were based on the Turing architecture and featured 12nm silicon. The 30HX was based on the TU116-100 and PG161 board and featured 6GB of onboard memory. The exterior design featured a dual-slot and dual-fan design with no display outputs and an aluminum fin heatsink that was actively cooled by the two fans. At the time, the crypto-mining GPU was worth over $723 in the US.
Authorities in April 2021 seized three hundred of these cards that were headed to Chinese mining farms. China has strict bans in several provinces against cryptocurrency mining because of the amount of power drawn and the financial impact of digital currency. Going off the cost of the card at the time, the total seized by customs was $216,900. Currently, the cost on third-party sites such as eBay is selling for just above the original MSRP price, which we could conclude that they are still seeing some use in the crypto community.
The following reported case was the next year in March, where Chinese customs seized a staggering 5,840 graphics cards from manufacturer XFX, who did not officially admit to the GPUs being "illegally mislabeled" to hide the names and specifications of the graphics cards. This was done to evade taxes, lower the cost of the GPUs, and then sell to consumers for higher prices. The specifics of the cards were not divulged, but the estimated value seized by authorities was around 3.15 million US dollars. After the investigation, XFX's website and the company's T-Mall retail outlet were shut down for several days. Once again, these cards were also widely used in crypto mining within China's borders.
In March 2022, an individual attempted to run from authorities to smuggle 160 Intel Core i5-12600KP processors attached to the inner side of his calf, waist, and abdomen. In addition to the processors, the individual also was carrying 16 folder-style phones across borders, which, at the time, were in high demand. The total amount of processors was mostly the Intel Gen Core i5-12600KF, but it is unknown what the others, if any, would have been. The cost, at the time, was $330 each, totaling $52,800. The estimated expenditure on Intel's website at the time of this writing is between $290 to $300, which drops between $46,400 to $48,000.
The end of the year brought a Chinese woman attempting to smuggle over 200 Intel processors across borders in a prosthetic pregnancy belly to make it appear that the woman was in her third trimester. The significant red flag was how the woman walked through customs, seemingly without discomfort or stress from the added weight. Once detained, authorities found the woman smuggled 202 Intel Alder Lake processors and nine mobile phones. It is unknown whether the exact processor is to be believed to be the Alder Lake series processors being transported between regions illegally, which makes this cost estimation more widespread. Upon release, the Alder Lake series desktop processors ranged between $160 to almost $600, so the total is estimated between $32,320 to $121,200.
This month, we reported on two cases but had one fly under our noses. The two we reported on were an individual attempting to pass the non-declaration lane at the Qingmao Customs, where officials found 84 Kingston solid-state drives within the front shaft of the electric scooter. These M.2 NVME SSD drives were neatly wrapped and fit perfectly in the front bumper. The exact model is unknown, but judging from the blurry images, it may be the Kingston NV2 PCIe 4.0 NNME SSD, primarily used for laptops and small form factor (SFF) computers. The memory ranges between 250GB to 2 TB and $22 to $100. If this is true, the total cost of this attempt ranges between $1,848 and $8,400.
The second attempt was reported two days ago, where a man had 239 Intel 13th Gen Core i5-13400F CPUs taped to his legs, abdomen, and waist. Officials found the man walking quite abnormally, which quickly tipped them that something was wrong. The individual was wearing loose-fitting clothing, all in black, as he was trying to pass customs. The total amount of seized processors was $46,844, but ranges per retailer could easily top the $50,000 range.
This last instance, which happened a few days ago, was at the Shatoukaku Customs. This area connects both Shenzhen and Hong Kong. Officials reported that a five-seater passenger car, which officials inspected, was hiding 360 processors along with 100 SSDs inside of the gearbox. The processor is the Intel i3-13100, while the SSD is the Western Digital WD_BLACK SN770. The processors have an estimated cost of $134 to $144 (per Intel's current recommended customer price), and the SSDs range between $35 to $120 on the company's website. The total from this case is estimated between $51,740 to $63,840.
Before 2022, during the cryptocurrency boom, the total dollar amount seized by officials was estimated to be close to $3,366,900. Considering that most graphics cards at that time were selling for inflated costs due to piracy and more, the total customer cost could be twice that amount. Now, the demand is much different.
Once 2022 hit, and we began our struggles with China, the need for computer components increased as the US halted any shipments overseas to halt military growth. Reports concluded that the Chinese government was purchasing pieces from sites such as Alibaba, eBay, and others, but these parts were consumer-grade and not industrial-grade. Given the current global situation, the toll China has taken to reach such lengths to acquire parts is most certainly heightened. Also, manufacturers are limited in the area, so attempts to get parts for OEMs and more are at an all-time low with the area's limitations. If these smuggling attempts correlate with the demand from China, the total cost, at this time, is estimated to be $177,304 to as high as $279,284.
We are only entering the second quarter of 2023. China's smuggling attempts have already amassed nearly a quarter of a million dollars, with a significant focus on Intel CPUs from the Alder Lake and Raptor Lake generations. It will be interesting to see further attempts and if groups will adopt to sneaking AMD chips through various customs channels.
News Source: PC Watch
