AMD: UK has avoided fake chip shipments

AMD has warned that anyone offered a high-performance system that's as cheap as chips should beware

AMD has rejected claims that Europe has been flooded with falsely labelled chips, after police raided four companies in Taiwan which are suspected of tampering with or selling remarked processors.

Around 60,000 AMD chips were recovered in the raids. Police believe that a criminal gang planned to rebadge the processors -- which were defective and meant for destruction -- as high-performance chips which could be sold to unsuspecting users.

Some reports have claimed that up to one million relabelled chips have already been shipped to China and Europe, but AMD UK denies that consumers in countries such as the UK are at risk.

"We don't believe that any of these chips have reached Europe at this moment," an AMD UK spokeswoman said, adding that for legal reasons AMD won't give out many details at this stage.

If relabelled chips do reach the UK they are likely to come through the "grey market" -- where goods normally only available overseas are shipped into Britain and resold. They could also be offered by smaller resellers, or even via Web auction sites.

Although it insists that relabelled chips probably haven't reached Europe, AMD is still advising customers to stick to legitimate channels.

"We would recommend that people only buy from authorised distributors, then they should have no problems at all," the AMD UK spokeswoman said.

Analysts say the practice of relabelling processors is still fairly rare. It's more likely to occur in times of tight supply, or in so-called emerging markets, where customers might be more price-sensitive and also more lax about whom they buy from.

"It's really market dependent," said Dean McCarron, a principal analyst at Mercury Research. "It's a lot more common when supply is tight -- and we've been in a tighter supply environment, especially in the last quarter -- and where there's a sizable spread in product pricing. Typically, it's pretty minor [in its impact on the market]. You wouldn't find a tier one or tier two [PC maker] buying products from a supplier they had never worked with before."

CNET News.com's John G. Spooner contributed to this report

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