U.S. authorities place trackers in semiconductor shipments to mitigate diversion to China

Industry Surveillance and Regulation - US authorities are reportedly placing secret trackers in shipments of advanced semiconductors to detect chips diverted to China [1] - The trackers range from tiny devices to smartphone-sized units, hidden in server packaging for specific shipments under investigation [2] - Dell states they are unaware of a US government initiative to place trackers in product shipments [2] - Nvidia denies installing secret tracking devices in their products [2] - US Treasury Secretary assures no national security concerns with Nvidia chips, but acknowledges the smuggling problem [3] Market Dynamics and Illegal Activities - Two Chinese nationals were arrested for illegally exporting millions of dollars worth of Nvidia chips to China [3] - A thriving black market exists in China for advanced chips [3] - The Financial Times estimates approximately 1 billion USD worth of Nvidia products were traded into China last quarter [3] Supply Chain Challenges - Tracking chips once they leave the factory remains nearly impossible at scale, highlighting a fundamental challenge in the global semiconductor supply chain [4] - Tracking individual chips is complex and would require embedded software, turning each processor into a beacon [2]