Report: Tech Companies Fear China Spying Through Power Cords

Major tech companies including Dell, IBM, and HP are reportedly concerned that China may be spying on them through power cords and plugs manufactured in the country.

CNBC, citing a report from Nikkei Asian Review, claimed that the companies are fearful “that China could be spying on them using power cords and plugs,” and “have asked their Taiwanese suppliers to shift production of some components out of the mainland.”

Companies including Lite-On Technology and Quanta Computer have reportedly moved to Taiwan in response to concerns from their American customers, which include Google, Facebook, Dell EMC, IBM, and HP.

According to Nikkei Asian Review, Lite-On Technology “is building a new factory in Taiwan to manufacture power components for servers at the request of American clients that cited cyberespionage risks from Beijing,” and Quanta Computer “has shifted production to Taiwan and elsewhere, citing security as one of the reasons.”

A Lite-On executive allegedly told Nikkei Asian Review that, “Unlike many other Taiwanese tech manufacturers diversifying their production away from China to avoid Washington’s tariffs on Chinese goods, the top priority [for Lite-On’s new plant] is addressing U.S. clients’ security concerns.”

Tien Chin-Wei, a deputy director at the Cybersecurity Technology Institute, also reportedly told Nikkei Asian Review that the concerns were “totally reasonable,” because “technically, it is doable and not difficult for hackers to use the power supply system or power cords to retrieve data stored in servers.”

“Every interface between components, or between motherboards and power supply systems could be a loophole for malicious implants,” Tien elaborated. “You can only reduce or manage the risks, but it is not possible to entirely eliminate the threats.”

The Trump Administration recently banned government agencies and contractors from purchasing products from Chinese tech company Huawei, following security concerns, prompting the company to sue the U.S. government.

The United Kingdom and the European Union have also reportedly considered restricting Huawei, while the Czech Republic’s National Office for Cybernetics and Information Security labeled the company a security risk.