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NewEgg Confirms Shipping Fake Core i7s 314

adeelarshad82 writes "After originally rejecting the story, online retailer NewEgg confirmed that a shipment of Core i7s were indeed fake, and apologized for the affair. NewEgg has also broken off its relationship with IPEX, the supplier of the phony lot. The retailer said that it has already contacted affected customers and would continue to reach out and replace the counterfeit parts. We discussed the fake Core i7s over the weekend."
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NewEgg Confirms Shipping Fake Core i7s

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  • by colin_faber ( 1083673 ) on Tuesday March 09, 2010 @06:14PM (#31420014)
    Want to find even more? Try buying some flash on ebay sometime.
    • by ILuvRamen ( 1026668 ) on Tuesday March 09, 2010 @08:17PM (#31421338)
      This isn't memory chips. This is high end, new intel processors. I've never heard of someone faking processors ever. It just seems completely insane. I can't wait to find out who made these and where and how they ended up "in the line" to newegg. It probably wasn't the intel factory and nobody at newegg's supplier would be stupid enough to purposely try and rip them off with something that would so obviously get caught. That's a great way to destroy your own business! So that begs the question...how many damn people get these processors on the way from Intel to Newegg? What a waste of time and money if it's anything but Intel -> distrubutor -> Newegg. I especially don't want to pay an extra $20 for my processor to have it shipped to 8 different people first, one of which decided it was a good idea to add in or swap out some fakes. Time to cut out the middleman!
      • by fuzzyfuzzyfungus ( 1223518 ) on Tuesday March 09, 2010 @11:16PM (#31422562) Journal
        What is interesting about this case is that the processors in question were totally fake, just rather crude physical models of processors.

        Much more common in tech related gear is partial fakery. The classic flash memory trick is 256MB(or whatever the value) of actual flash(and probably bottom bin stuff, at that) with the formatting or firmware claiming to be 4GB(or whatever the larger value) and doing various things certain to make the customer sad when you write more than 256MB to the device. If you get lucky, you'll get an actual 4GB of bottom-bin crap, with an "OMG LExar high speed!!11!" sticker on it.

        With CPUs, basically no counterfeiters have the technical capability to produce plausible fakes from scratch for less than intel or AMD can produce the genuine article. However, there is a long history of selling overclocked and remarked low-end parts as higher end ones. That has become more difficult these days(with multipliers locked on all but the most expensive chips, you really can't overclock without the connivance of the motherboard. Intel's fancy new power-control microcontroller probably makes it even trickier). However, there is a cute way of getting around that: Modifying CPUs is hard and expensive. You need careful technique and serious rework kit. Basically not worth it. Modifying a motherboard's BIOS just a bit, to change the values that it reports for certain processor related parameters and maybe does some silent overclocking, is within the reach of a few decent software/firmware engineers. Thus you do sometimes see for sale(usually aimed at unscrupulous small computer shops, rather than retail users, CPU + motherboard combos consisting of a cheap CPU(bottom of whatever the range is at the moment) and a none-too-exciting motherboard with a BIOS hacked to claim, in all visible ways, that the CPU it is paired with is actually a much faster and more expensive unit.

        Frankly, I much prefer complete fakes. They are a nuisance, certainly; but they are immediately obvious on inspection. The dangerous fakes are the ones of commodities where quality and realness are matters of degree, rather than binaries. Real/Visibly just a crude model is easy. 4GB/512MB+firmware lies can easily take some data loss to discover. Real/cheap under-specced capacitors were used, resulting in a higher 3 year failure rate can take ages to diagnose. Real/diluted to 25% of its actual dose and sold as real can get people killed and encourage drug resistance in various nasty pathogens.
        • by Ecuador ( 740021 ) on Wednesday March 10, 2010 @07:51AM (#31424718) Homepage

          Oh, man... you will love this article: http://news.yahoo.com/s/pcworld/20100308/tc_pcworld/fourreasonstobewarefakeintelcpus [yahoo.com]

          Authentic Intel Core i7 processors contain a number of innovative technologies to improve performance. Core i7 chips have an integrated triple-channel memory controller. They also replace the archaic front-side bus architecture with Intel's new QuickPath Interconnect system, and use hyperthreading to turn the Core i7's four physical processor cores into eight virtual cores.

          A fake processor would most likely not have these cutting edge advantages, resulting in inferior performance compared with the authentic Intel processor.

          Apparently for some people the difference between an i7 and a piece of scrap metal is some innovative technologies that improve performance!

    • Re: (Score:3, Interesting)

      by kimvette ( 919543 )

      or, try buying Windows 2003 Server from any seller on feeBay or Amazon. There is a good chance every single Windows 2003 product on either site is counterfeit. I bought from six different sellers and every single one was counterfeit (same exact style packaging, etc.) and I reported each instance in detail (including detailed descriptions of the media, packaging, the COA decals, what software was actually on the media, etc. and even tested the product keys with a known-legitimate system builder kit. Each am

  • by Nefarious Wheel ( 628136 ) on Tuesday March 09, 2010 @06:14PM (#31420020) Journal
    "But... if you can't trust the Government, who can you trust?"

    - Yahoo Serious, Young Einstein

    • by Etrias ( 1121031 ) on Tuesday March 09, 2010 @06:20PM (#31420086)
      I'm not sure quoting Yahoo Serious will get you +5 Funny. Maybe +5 What the Hell?
    • Re:Caveat Emptor (Score:5, Interesting)

      by irieken ( 871019 ) on Tuesday March 09, 2010 @08:10PM (#31421278)
      The fact that such obviously counterfeit parts made through Newegg's supply chain is a little bit unnerving... I know that Newegg said that these were "Demo Boxes"... but from the video that I had seen, these boxes included badly made tamper-evidence stickers and holograms. This leads me to wonder if "functional counterfeits" of Intel/AMD processors have been sold by Newegg.
      • Re:Caveat Emptor (Score:4, Insightful)

        by fuzzyfuzzyfungus ( 1223518 ) on Tuesday March 09, 2010 @11:32PM (#31422674) Journal
        Given the relatively pathetic state of non Intel/AMD x86s(VIA, a few oddball embedded guys, crickets...) I would be very surprised if there were anybody out there who could make money by fabbing chips close enough in function to be mistaken for the real thing for the price of the real thing or a bit less(since you usually have to offer the buyer some savings to induce them to go grey). Particularly given the mess of x86 extensions that intel(particularly) and amd(sometimes) are introducing. Even AMD is always lagging intel's latest SSE v.N+1 for a bit.

        Back in the day, before this became a lot harder, there were quite a few low end(but authentic) CPUs with faked high end markings on them, and sometimes with multiplier tweaks to match, floating around. That was back when there were more CPU vendors that were socket compatible and actually vaguely competitive, so there was probably some rebranding going on as well. I don't know if Newegg was around early enough to have been at risk of those.

        These days, the only really viable way of making "functional counterfeits" of either Intel or AMD would be to have insider access to their lower binned dice before their inferior model status is lasered into them. If you have that kind of access, sneaking chunks of quite valuable product out of some of the world's most sophisticated fabs, you could probably make more money selling secrets or suitcase nukes...
  • by Dragoniz3r ( 992309 ) on Tuesday March 09, 2010 @06:15PM (#31420026)
    It was a little up in the air there for awhile!
    • Re: (Score:2, Informative)

      They were leaning on that "oh, our bad, we got some 'demo units' by mistake" excuse pretty hard.

      Demos? C'mon, demos are supposed to work, not be a blob of aluminum.

      • by c++0xFF ( 1758032 ) on Tuesday March 09, 2010 @06:25PM (#31420162)

        Depends on the demo.

        Chip manufacturers will often give away defective chips as demos to those thinking of using them in circuit boards. Non-functional demo chips are used in the design phase as the boards are laid out and the first parts are placed.

        Imagining wasting a working chip just to find out if you're soldering things on correctly.

        Partially-functional chips (might work but still failed testing for obscure reasons) are also used as demos for building prototype boards.

        Neither case applies for NewEgg, however.

        • Re: (Score:2, Informative)

          by Anonymous Coward

          These weren't demo units, they are nothing like demo/sub-standard products. Search them out on the youtube posts on it. Basically they're just squares of aluminum (no pins) and a plastic mold for the fan with a sticker on it for the blades. Most people are assuming they're duff but real CPUs, they're not, they do not function, cannot function, and do not look like the real parts.

        • Re: (Score:3, Interesting)

          by martas ( 1439879 )
          what if they were testing their packaging pipeline?
        • Re: (Score:3, Funny)

          "We don't know why you wanted 1% defective chips" said our Japanese supplier, "But here they are; we packaged them separately".
      • by petermgreen ( 876956 ) <plugwash @ p 10link.net> on Tuesday March 09, 2010 @08:01PM (#31421206) Homepage

        They were leaning on that "oh, our bad, we got some 'demo units' by mistake" excuse pretty hard.
        My guess is they were just passing on what thier supplier had told them until they could prove otherwise.

        It's kind of a difficult position to be in. Newegg probablly didn't want to lie but they probablly didn't want to be publically seen as doubting thier suppliers either until they could prove that the supplier was indeed shipping fakes.

      • by Mr. Freeman ( 933986 ) on Tuesday March 09, 2010 @11:54PM (#31422814)
        MARKETING demos, not engineering demos.

        The marketing team doesn't need to pull out the processor, install the HSF, etc.
        They just have to look at the box and see if the packaging is appealing. You don't need functional equipment for that, you don't even need dead equipment for that, you just need something that looks like the product.
  • Intel Inside... (Score:2, Informative)

    by Anonymous Coward

    I sure liked the typos on the box. All that effort to duplicate holograms and what not, and they blow it on spacing and spelling.

    Criminals, you gotta love their chutzpah.

    • ...Because everyone reads the back while shopping? Lets say this was inside a store, you say "Hey, I want a Core i7 model XXX, they find the box, it looks official, same model XXX you wanted so you buy it and take it home. You aren't going to read the blurb on the back about it, because you know what you want. Its only after you realize that you've been scammed that you would realize some of the typos.
    • Re: (Score:3, Interesting)

      by RsG ( 809189 )

      I've worked in an electronics store. Let me tell you - typos on the box? Not a sign of phony merchandise. At least not in and of itself. A surprisingly large number of legitimate items have such errors, and usually the only people who notice are the depot/stock/merchandising/receiving staff.

      Half the time the products or packaging in question are made somewhere in southeast asia (china, usually) so the culprit is the language barrier for the QA people. The other half, the problem is they just didn't car

  • Rejecting?? (Score:3, Informative)

    by Anonymous Coward on Tuesday March 09, 2010 @06:18PM (#31420058)

    When did they reject the story??

    They never denied shipping fake units... the only difference between their story then and now is WHY the fake units existed.

  • by SpazmodeusG ( 1334705 ) on Tuesday March 09, 2010 @06:20PM (#31420084)
    Newegg were on top of this pretty early.
    They never denied there being a problem although they took a day to figure out what was happening.
    They have already apologized, announced they are sending out replacements and announced they are getting a new distributor a couple of days ago.
    • by Anonymous Coward on Tuesday March 09, 2010 @06:23PM (#31420126)

      True, that's an amazing amount of professionalism and quick action on their part. Pity shame that for some Slashdot readers, that won't be enough, and they won't be happy until they see Newegg executives' heads on pikes, even if it wasn't their fault. Mmm, tasty, frothy bile...

    • Re: (Score:3, Interesting)

      I don't order parts online that often, but because of this, Newegg is getting put right to the top of the list of places I look at first when I do.

      • by noidentity ( 188756 ) on Tuesday March 09, 2010 @06:47PM (#31420464)
        Hell, I've never ordered from NewEgg, but they're the first place I go for reviews, and to leave my own reviews of products. I haven't found any other "review" site that isn't mostly ad-laden crap and pages with the title "Reviews of ", only to be empty and say "Be the first to review !".
        • Re: (Score:3, Interesting)

          by bhtooefr ( 649901 )

          Except Newegg reviews are the YouTube comments of the review world.

          • by rts008 ( 812749 ) on Tuesday March 09, 2010 @07:20PM (#31420830) Journal

            That's because they let *gasp* even MERE MORTALS post reviews!!! I mean, Joe Sixpack and Mary Mundane can purchase goods and post reviews at Newegg!!
            It would be different if only we Tech Gods and Wizards could post reviews, I tell you!

            Like is said:
            'A picture is worth a thousand words.'

            Forget the comments, just look at the videos on YouTube...crotch bats, toolbox surfing in a suburban neighborhood, etc.
            The same type of people that are making the comments are also posting videos, shopping online, and yes, even voting.

            • Re: (Score:3, Informative)

              by Mashiki ( 184564 )

              That's bloody insightful in my book. Not even with sarcasm, personally if idjit joe can figure out how to make it work and work well. And there's a low failure rate it means that it's safe to use with half of my family.

    • by eepok ( 545733 )

      Yep. Newegg has never done me or anyone I know any wrong. They've done a couple things incorrectly over my massive number of purchases with them (like sending me some ddr266 instead of ddr300 ram), but the day I told them was the day they told me to send it back and they'd replace it.

      This entire ordeal has only further solidified my loyalty to checking them first and giving their products a premium preference.

  • fake fakes? (Score:4, Insightful)

    by Sporkinum ( 655143 ) on Tuesday March 09, 2010 @06:24PM (#31420138)

    I wonder if anyone who got an i7 will try to make a fake fake to get another i7. Some one in Newegg's shipping will have to check the fakes to make sure they are real fakes. My head just exploded.

    • I think that's a non issue. First off, without RTFA or the previous discussion, I'm pretty sure there are telltale visual signs if it's fake or not. Second, the only way you would know is by plugging the sucker in and why bother disassembling half your computer, repacking the CPU and sending it back for ANOTHER i7. I fail to see the logic in it.
      • Re:fake fakes? (Score:4, Informative)

        by MartinSchou ( 1360093 ) on Tuesday March 09, 2010 @06:32PM (#31420266)

        Not true. We aren't talking "fake - not the correct part", we're talking "fake - not a cpu but a hunk of metal, not a cooler just a piece of plastic with a sticker on it".

        If you are buying cpus, you'll know they're fake when you see them.

      • Sure, but how many people are going to look for typos? Sure, if you are boxing 2 or 3 Core i7s a day its realistic you can look at them, but lets say that you have to stuff 200-300+ a day while having to put others in boxes?
    • Re:fake fakes? (Score:5, Insightful)

      by tnk1 ( 899206 ) on Tuesday March 09, 2010 @06:33PM (#31420278)

      Newegg has to track outgoing inventory to prevent internal theft, so it is a good bet they probably associated an inventory item with an outgoing order. So, if they know which order the customer is returning, they can probably trace it back to the original supplier in some manner. If they have a good tracking system, they could probably bring up that detail immediately.

  • D&H Distributing (Score:5, Informative)

    by ptbarnett ( 159784 ) on Tuesday March 09, 2010 @06:28PM (#31420194)
    HardOCP was apparently the original source of the allegation that D&H Distributing was the source of the counterfeit CPUs. They have since apologized to D&H, claiming that their source of information was someone inside NewEgg.

    Counterfeit Intel CPU Saga Comes to a Close [hardocp.com]

    At no time did HardOCP speculate as to what company was supplying the counterfeit processors to Newegg. Our source that informed us of the supplier being D&H Distributing came from within Newegg's organization. We belived the information to be accurate and reported it to our readers. Newegg is stating that IPEX shipped it the counterfeit processors. I am not sure as to why we would get conflicting information, and we will further investigate that.

    At this time we offer our apologies to D&H Distributing for naming it as the supplying distributor. HardOCP was simply reporting the information that we believed to be accurate. We would NEVER "speculate" on something of this nature, as there is NOTHING for us to gain by misinforming our readers. We will be investigating further as to why we were misinformed on this detail.

    • by bfagan ( 71306 ) on Tuesday March 09, 2010 @06:35PM (#31420302)

      This is exactly why trustworthy reporting outlets try to verify sources before reporting as fact. However, this becomes difficult in this time of now, faster, beat the other guy, instant publishing.

      • Re: (Score:3, Insightful)

        They did verify the source. That doesn't mean the source is infallible (or if you're into conspiracy theories, maybe D&H was more important to NewEgg than IPEX, and so they're scapegoating the latter for the former, and the original source was right...).

        If you have a news item about something that happened at company, and low level person there gives you some information, are you just going to ignore it? Please.
    • Re:D&H Distributing (Score:4, Informative)

      by Klinky ( 636952 ) on Tuesday March 09, 2010 @07:39PM (#31421024)
      I am not a fan of HardOCP, once they were posting eBay auctions on their front page from one of their sponsors as being a "Hot Deal", specifically advertising the starting bid price as though it were the actual price of the product being sold. Misleading big time, this was cross posted into their Hot Deals forum as well. I posted a message on their forum asking when did eBay auctions suddenly get allowed into the Hot Deals forum(the rule previously was that eBay auctions were not allowed at all). I got banned for "thread crapping in a sponsors thread". Glad they value their sponsors misleading advertisements over their readers.
  • Why can't they buy direct from Intel?

    • by swb ( 14022 ) on Tuesday March 09, 2010 @06:50PM (#31420498)

      I get why Intel doesn't want to *retail* them, but what's the point of a wholesaler when you have a retail distributor as huge as Newegg?

      And the same is true of other products sold via other retailers.

      It almost seems like "we/they" put up with a needless set of middlemen who only mark stuff up.

      • by martas ( 1439879 )
        so you're saying newegg should become walmart?

        i know, i know, -1 flaimbait...
      • Re: (Score:3, Informative)

        by Anonymous Coward

        Distributors, wholesalers or middle men if you prefer provide both inventory and financing for retailers, even large ones. The goal in a business like Newegg is to receive funds from customers before you have to pay your suppliers. In other words you don't want your capital tied up in inventory if you can help it. Of course not having inventory can mean lost sales so there is a balancing act required.
        Its all about terms and conditions.

    • Volume discounts.

      Resellers would benefit from getting together and purchasing in very large volumes, but in practice they just dont get along. Thus creates the need for Distributors.

      Distributors supply many Resellers, so they act as a proxy of that deal the Resellers can't agree on amongst themselves. The Distributor gets a much better volume discount than any Reseller can individually, so both Distributor and Reseller can gain from this arrangement.

      The manufacturer gains because their operation is mu
    • Re: (Score:3, Interesting)

      by coolgeek ( 140561 )

      They probably do, but I imagine everyone is still on allocation with the i7, so newegg is forced to go to the open market to meet the demand.

  • Let this be a warning to all you rig builders wearing blindfolds! Hopefully those fakes are casted with a cheap, non-conducting alloy, otherwise break out the popcorn.
  • Who is IPEX? (Score:5, Informative)

    by eepok ( 545733 ) on Tuesday March 09, 2010 @06:53PM (#31420524) Homepage

    http://hardforum.com/showpost.php?s=d01ac05d09e4f3d3bfb4364cdbc5d2af&p=1035432866&postcount=927 [hardforum.com]

    From [H] Forums:

    I just want to clear up something Paul keeps bringing up in this thread: Ipex is a division of ASI. Ipex isn't ASI.

    Full disclosure: I worked for ASI for some time back in the 90's (God, I feel old).

    ASI is a legit Intel distributor (one of only a small handful) and is one of Newegg's biggest sources for Intel CPU's. Ipex, on the other hand, is the division that deals in gray market CPU's, RAM, etc.

  • by eepok ( 545733 ) on Tuesday March 09, 2010 @08:31PM (#31421490) Homepage

    http://www.crn.com/hardware/223300173;jsessionid=B1V040G2ULN1LQE1GHPSKH4ATMY32JVN [crn.com]

    "Ipex has been supplying computer components to the technology industry for over 10 years with the goal of providing quality products and services to our customers. Recently we were referenced in connection with some counterfeit Intel Core i7 920 Microprocessors sold within the US market. While we purchased these products in good faith from a supplier we are very disappointed to learn of the questionable status of these products and are taking appropriate action to resolve the issue for any impacted Ipex client as well as are fully cooperating with Intel's investigation in to determining the original source."

APL hackers do it in the quad.