South Korea smuggled $12 billion worth of chips to China

The South Korean Customs Administration reported that the country smuggled $11.6 billion worth of chips to China. In total, about 53 thousand chips were smuggled, writes Tom’s Hardware.

The Customs Administration found strategic chips that were developed with the help of American technology that were being smuggled through Korea to China. The chip smuggling lasted from 2020 to 2023 and was carried out by air. A total of 144 such cases were recorded.

Reportedly, the smuggling is not being prosecuted against specific individuals, but rather against an entire “Company A” whose name has not been disclosed. The illegally smuggled chips were designed to convert an analog signal into a digital one.

Because such chips can be used to create weapons of mass destruction, they have been subject to import and export restrictions since 2020.

Company A was able to conceal the smuggling for so long because of its cover. The company seemed to be doing legitimate business in South Korea, but it was ordering far more chips than it needed. This excess was shipped to China.

This is the largest recorded smuggling of chips in terms of price and quantity. Previously, the largest such operation was the smuggling of chips, SSDs and other electronics from Hong Kong to China. At that time, the value of all products was about $4 billion.

All of Company A’s operations were successful and the South Korean Customs Administration only learned about them some time after they were completed. The CEO and other executives of the company face serious penalties, while the use of the illegally smuggled chips remains unknown.