Coming face to face with a clandestine Hong Kong production line crammed with counterfeit chips convinced PC reseller Ray Shaw he was looking at one reason for the Australian market's current woes.
Shaw, president of Brisbane's Intermedia Computers, was guided to the backstreet RAM memory chip plant by one of Hong Kong's larger board resellers during a June holiday. "The place was the size of a bedroom in a suburban house in the back of the Golden Arcade shopping centre," he said. "In the half hour I was there, I saw four people come in off the street, no questions asked, carrying alfoil-wrapped blocks that would have held 1,000 chips each."
According to Shaw, the chips were inspected and put on a tiny conveyor belt that took them through a surface grinder to a stamping machine. The grinding operation stripped off the original trademark and specifications and the stamping machine printed a new logo, he said. "They generally put on a close facsimile to a legitimate trade mark and this one was re-marking the chips with something similar to Hyundai's three-star logo. Then the chips were put on surface-mount SIMM cards by people painting glue on the card with a brush and hand mounting the chip," Shaw said.
Quality control consisted of putting the "new" RAM into a PC and seeing if it would cycle though a boot-up self-test routine, he said. Shaw said he guided to the plant "to warn me off the product by letting me see how poor the quality was". He was taken to a second backstreet plant where he says he saw a CPU re-stamping line turning Intel Pentium 75s into Pentium 100s. After having an Intel-like round fan added, the chips were packed into boxes printed with Intel markings complete with hologram.
"There would have been a minimum of 2,000 Pentium 75s I saw turned into 100s with a price difference of $A40 to $A50. They were also turning 100s into 133s for a $A200 price difference. It was absolutely blatant and they are getting away with it because as long as people look for a bargain, this will go on. The man in charge said one of his major clients was in Australia," Shaw said.
As for the RAM chips, "I could have bought any amount of 4Mb SIMM for $A30 and 8Mb for $A60 but the quality was so poor I'd estimate that 70 per cent of them would give problems," Shaw said. However, the chips are almost certainly being fed back into the Australian black market, he said. "They basically load a briefcase full of SIMMs, fly to Australia and walk through customs. There's no paperwork so they avoid sales tax entirely. If customs does pick it up as they come through, they simply cite their Australian sales tax number."