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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Engel who wrote (55458)	5/13/1998 5:20:00 AM
From: Mick Mørmøny	Read Replies (1) \| Respond to of 186894

Illegally altered chips found in thousands of PCs By Neal Boudette FRANKFURT, May 12 (Reuters) - A growing number of illegally altered Intel Corp (INTC - news) processors are finding their way into computers in the United States and other countries, a German magazine said on Tuesday. The magazine, CT, has begun distributing a programme that can identify Pentium II chips manipulated to run at higher speeds -- and fetch higher prices in the ''grey market'' for critical computer components. ''We have no idea how many falsified chips are out there, but in one week we had reports of more than a thousand,'' CT editor Christian Persson told Reuters. ''Worldwide, it could be many tens of thousands of chips.'' Georg Albrecht, an Intel spokesman in Munich, said the company has worked aggressively to stop the tampering. He said such ''counterfeit'' chips make up a small part of the millions of Pentium II processors in the market. ''It is very hard to estimate how many are out there,'' Albrecht said. ''Even if you are talking about 2,000 or 5,000, that is very small because we make millions and millions of chips per year.'' Still, he said Intel takes counterfeiting very seriously. ''It is a violation of our intellectual property rights and it hurts the customer who thinks he is getting a genuine Intel chip.'' Falsely labelled chips sometimes overheat at their increased speeds and can cause other parts of a PC to fail, Persson said. CT's ''ctP2info'' test programme, available from its Internet Website heise.de, has been downloaded more than 3,000 times, Persson said. So far, CT has heard of 333 cases of falsely labelled Pentium II processors -- and 210 of them came from the United States. Germany was next on the list with 42, followed by Australia with 13 and Canada with 12 cases. ''That was surprising,'' Persson said. ''It is not true that these chips are only in certain areas of the world.'' The reports come about a month after Taiwan authorities seized about 1,000 counterfeit Pentium II chips worth millions of dollars. The counterfeit chips are actually made by Intel, but are most often improperly altered to run at a speed of 300 or 350 megahertz instead of the 233 or 266 speed set by Intel, Persson said. CT's programme can tell if a chip has logic that supports error-correcting code (ECC) memory. Official 300 megahertz Pentium II chips have this logic, while older, slower versions don't. Albrecht said Intel acknowledges that the programme correctly identifies the ECC functionality. ''It is not an Intel programme, but it can be a useful tool.'' Counterfeiters take advantage of price drops for slower chips no longer in high demand and tweak them to appear to be speedier models. Official 350 and 300 megahertz Pentium II chips have list prices of $621 and $375, respectively. The 233 megahertz version sells for $198, although several months ago it was selling for $600 or more. To alter a chip, counterfeiters usually have to put it into a new plastic housing, and recreate a hologram that Intel uses to identify genuine processors, Persson said. It is a process that requires some level of technical expertise and proper chip-assembling equipment, but it is not overly difficult, he said. "It is easier than counterfeiting money," Persson said. Counterfeit chips are usually sold into a grey market where brokers buy components and sell them to computer companies who need them right away and are willing to pay higher prices. These chips often find their way into ''no-name'' computers, or machines made by off-brand ''assemblers.'' But Persson said they can also end up in top-name PCs because the major manufacturers sometimes have to buy chips on short notice when demand spikes, and some turn to the grey market. ---------------------------------------------------------------------- c't software exposes fake Pentium II models heise.de --------------------------------------------------------------------- No wonder Intel gets the bum rap through no fault of its own.