A Sign of the Times: Hong Kong Authorities Dismantle Smuggling Operation... Which Included 300 NVIDIA CMP Cards

[Raevenlord]

A sign of the times indeed, when secretive, smuggling boats add NVIDIA CMP graphics cards to their cargo instead of other illegal goods. That's what just happened in Hong Kong, where authorities with the Hong Kong Customs and Excise Department seized a smuggling fishing boat that was unsuspectingly (or maybe not so unsuspectingly) anchored just outside the Hong Kong International Airport. While some of the smuggled goods were par of the course for the authorities - exotic foods and high-value, low-footprint technological gadgets such as smartphones and tablets - the smugglers were also carrying 300 unmarked NVIDIA CMP 30HX GPUs.

That they were unmarked means they were deviated from the assembly lines before they were actually processed for final packaging, and thus we're now looking at definite proof of shipments being deviated from their intended destinations - which means this happens not only for CMP cards, but also for consumer-grade RTX 30-series. Another day at the office of post-COVID, production shortages, and mining boom, as it relates to computer hardware pieces.



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[neatfeatguy]

A lot of people have argued with me on other forums that these things don't happen. There was no way that GPU manufacturers were selling off loads of GPUs before they were offered to retail, the shortages were simply due to supply being very limited and demand being very high.

Think about it. A lot of giant corporations are in it for the money (some may say all, but I'd like to be optimistic that at least 1 giant corporation will prove you wrong) and if you can think of a way they can skirt the system to boost profits and make things look better to increase their bottom dollar and impress the investors, I'm certain they are doing all of those schemes and then some you would never have dreamed of.

That's what just happened in Hong Kong, where authorities with the Hong Kong Customs and Excise Department seized a smuggling fishing boat that was unsuspectingly (or maybe not so unsuspectingly) anchored just outside the Hong Kong International Airport.

A guy I work with, he said one technique he used to do years ago when he helped run "goods" was to have a "setup" vehicle get caught moving a small portion of "goods". The trick was to make it obvious that something was being transported and once all eyes were gawking at the "setup" and away from everywhere else, then they'd move tons (he said tons) of "goods".

So, let the authorities make a little bust while the rest of the goodies slip by unnoticed. It certainly is possible this was the tactic used here.....tip off the customs/police about a devious looking ship and folks moving packages. While the authorities merge on the ship, the rest of the smuggled goods that dwarfs the setup ship slowly floats on by as the authorities are none the wiser.

 

[milewski1015]

 

[Fluffmeister]

Decentralized digital currencies are and were always going to be manna from heaven for the black market, so this shit will go hand in hand with the goods that create the wealth.

If you have mined, this is your fault.

 

[Raevenlord]

A lot of people have argued with me on other forums that these things don't happen. There was no way that GPU manufacturers were selling off loads of GPUs before they were offered to retail, the shortages were simply due to supply being very limited and demand being very high.

Think about it. A lot of giant corporations are in it for the money (some may say all, but I'd like to be optimistic that at least 1 giant corporation will prove you wrong) and if you can think of a way they can skirt the system to boost profits and make things look better to increase their bottom dollar and impress the investors, I'm certain they are doing all of those schemes and then some you would never have dreamed of.



A guy I work with, he said one technique he used to do years ago when he helped run "goods" was to have a "setup" vehicle get caught moving a small portion of "goods". The trick was to make it obvious that something was being transported and once all eyes were gawking at the "setup" and away from everywhere else, then they'd move tons (he said tons) of "goods".

So, let the authorities make a little bust while the rest of the goodies slip by unnoticed. It certainly is possible this was the tactic used here.....tip off the customs/police about a devious looking ship and folks moving packages. While the authorities merge on the ship, the rest of the smuggled goods that dwarfs the setup ship slowly floats on by as the authorities are none the wiser.

Yeah, the authorities never consider something like what you just described can happen

 

[evernessince]

This is interesting because there were some larger voices (Hardware Unboxed for example) supporting the narrative that in fact gamers were the reason that video cards were out of stock. If stock is being diverted directly from the factory to mining, that possibility is a lot less likely. Of course, we've had reports of this before but nothing 100% confirmed until now.

 

[Bones]

I'm thinking if they really start digging (And probrably will) we'll see alot more and far worse come to light over it.
Nvidia themselves could be scrutinized or worse before things are done here.

 

[Wirko]

shipments being deviated from their intended destinations

I object to this logical fallacy. The cards were never intended to be shipped anywhere else. Heck, even the wafers weren't. Even the sand wasn't.

 

[80-watt Hamster]

A lot of people have argued with me on other forums that these things don't happen. There was no way that GPU manufacturers were selling off loads of GPUs before they were offered to retail, the shortages were simply due to supply being very limited and demand being very high.

Think about it. A lot of giant corporations are in it for the money (some may say all, but I'd like to be optimistic that at least 1 giant corporation will prove you wrong) and if you can think of a way they can skirt the system to boost profits and make things look better to increase their bottom dollar and impress the investors, I'm certain they are doing all of those schemes and then some you would never have dreamed of.



A guy I work with, he said one technique he used to do years ago when he helped run "goods" was to have a "setup" vehicle get caught moving a small portion of "goods". The trick was to make it obvious that something was being transported and once all eyes were gawking at the "setup" and away from everywhere else, then they'd move tons (he said tons) of "goods".

So, let the authorities make a little bust while the rest of the goodies slip by unnoticed. It certainly is possible this was the tactic used here.....tip off the customs/police about a devious looking ship and folks moving packages. While the authorities merge on the ship, the rest of the smuggled goods that dwarfs the setup ship slowly floats on by as the authorities are none the wiser.

For me, it was all speculation up to this point. Plausible, but there wasn't evidence to back it up. Now we get to start speculating how much gets diverted like this. 5%? 10? And who's signing off on it? It's possible (don't know how likely) that Nvidia didn't have visibility on this. If we're talking quantities in the hundreds, potentially thousands if somebody's good at it, that may be able to be concealed on the books. Either way, I'd wager NV's not getting any of the "bonus" money from these. But I could easily be wrong.

 

[purecain]

A lot of people have argued with me on other forums that these things don't happen. There was no way that GPU manufacturers were selling off loads of GPUs before they were offered to retail, the shortages were simply due to supply being very limited and demand being very high.

Think about it. A lot of giant corporations are in it for the money (some may say all, but I'd like to be optimistic that at least 1 giant corporation will prove you wrong) and if you can think of a way they can skirt the system to boost profits and make things look better to increase their bottom dollar and impress the investors, I'm certain they are doing all of those schemes and then some you would never have dreamed of.



A guy I work with, he said one technique he used to do years ago when he helped run "goods" was to have a "setup" vehicle get caught moving a small portion of "goods". The trick was to make it obvious that something was being transported and once all eyes were gawking at the "setup" and away from everywhere else, then they'd move tons (he said tons) of "goods".

So, let the authorities make a little bust while the rest of the goodies slip by unnoticed. It certainly is possible this was the tactic used here.....tip off the customs/police about a devious looking ship and folks moving packages. While the authorities merge on the ship, the rest of the smuggled goods that dwarfs the setup ship slowly floats on by as the authorities are none the wiser.

This method has been a mafia fav for a loooong time!!!! Theres only so many customs officers...

 

[DeathtoGnomes]

If you have mined, this is your fault.

I take offense to this, you can shove that statement where the sun dont shine. I am a gamer first, I mine when I sleep, people that think this way need to stop being butthurt and get over it. I know it sucks, but me and my barely afforable 1080 is not at fault.

A lot of people have argued with me on other forums that these things don't happen. There was no way that GPU manufacturers were selling off loads of GPUs before they were offered to retail, the shortages were simply due to supply being very limited and demand being very high.

Think about it. A lot of giant corporations are in it for the money (some may say all, but I'd like to be optimistic that at least 1 giant corporation will prove you wrong) and if you can think of a way they can skirt the system to boost profits and make things look better to increase their bottom dollar and impress the investors, I'm certain they are doing all of those schemes and then some you would never have dreamed of.



A guy I work with, he said one technique he used to do years ago when he helped run "goods" was to have a "setup" vehicle get caught moving a small portion of "goods". The trick was to make it obvious that something was being transported and once all eyes were gawking at the "setup" and away from everywhere else, then they'd move tons (he said tons) of "goods".

So, let the authorities make a little bust while the rest of the goodies slip by unnoticed. It certainly is possible this was the tactic used here.....tip off the customs/police about a devious looking ship and folks moving packages. While the authorities merge on the ship, the rest of the smuggled goods that dwarfs the setup ship slowly floats on by as the authorities are none the wiser.

reminds me of a will smith movie, Focus.

 

[R-T-B]

There was no way that GPU manufacturers were selling off loads of GPUs before they were offered to retail

This wasn't the retailer doing this, or it'd be legally declared and branded. This is more like workers pilfering from the line...

I object to this logical fallacy. The cards were never intended to be shipped anywhere else. Heck, even the wafers weren't. Even the sand wasn't.

The retailers that ordered them intended them in uh, real retail. Not black market retail.

Decentralized digital currencies are and were always going to be manna from heaven for the black market, so this shit will go hand in hand with the goods that create the wealth.

If you have mined, this is your fault.

Haha, sorry. World ain't black and white like that buddy.

 

[TheUn4seen]

Decentralized digital currencies are and were always going to be manna from heaven for the black market, so this shit will go hand in hand with the goods that create the wealth.

If you have mined, this is your fault.

Statements like this are so moronic that I actually have a hard time even considering people who utter them to be human beings. As a exercise, try buying slave labor, illegal substances, be it psychoactive, explosive or poisonous with cryptocurrencies. You can in a limited quantity, but the expected currency for any serious transaction is US dollars or Euro, sometimes gold. Cryptocurrenies are not as untraceable as some might think, gold or gemstones are better in that regard.
Cryptocurrencies are too volatile for both sides. Let's say you want to buy a fairly attractive young girl for your "gentleman's club". They usually cost around 2500 euro, but if you pay the equivalent in Bitcoin according to this day's exchange rate, tomorrow you might find out that what you paid yesterday is now worth 3000 euro or more in a few days. Or the market might go down and you have an annoyed seller on your back and believe me, such people are not ones you want to annoy. This also makes calculating the return on your investment really hard, which is just bad for business.

Honestly, using slave girls as currency is a far more reasonable approach and, in contrast to using cryptocurrencies, is actually done.
Crypto coins are great only if you treat them as a high risk, high reward investment, so if you have enough reserves to cushion losses, you are really desperate or treat them as a form of intellectual entertainment and don't care if you lose a few hundred euros from time to time.

 

[R-T-B]

The real crazy part is telling someone that if they bought one gpu and mined part time, they still "caused this." It's the problem with absolute statements like that. They don't hold up to scrutiny.

Like lol, nope. People who bought 32 cases of gpus and don't ever intend to game on them caused this. I mean I can prove that with simple logical statistics. Their impact is a lot higher than mine ever could dream to be.

 

[freeagent]

I don't believe it was workers grabbing off the line. If you are into manufacturing, especially on that scale.. everything is tracked from one operation to the next. This is totally an inside job, this goes higher up than line workers.

 

[R-T-B]

I don't believe it was workers grabbing off the line. If you are into manufacturing, especially on that scale.. everything is tracked from one operation to the next. This is totally an inside job, this goes higher up than line workers.

Maybe. But the workers are still the ones that do the grabbing (even if instructed to do so), and the retail company is still the one that looses. Some nameless individual in the supply chain benefits, but not the company at large.

 

[Caring1]

The real crazy part is telling someone that if they bought one gpu and mined part time, they still "caused this." It's the problem with absolute statements like that. They don't hold up to scrutiny.

Like lol, nope. People who bought 32 cases of gpus and don't ever intend to game on them caused this. I mean I can prove that with simple logical statistics. Their impact is a lot higher than mine ever could dream to be.

Degree of impact was never mentioned, contributing to the problem was.
Anybody that mines is contributing to the mining craze which in turn encourages more to dip their toes in.

 

[DeathtoGnomes]

Anybody that mines is contributing to the mining craze which in turn encourages more to dip their toes in.

Anybody that complains and moans should order cheese to go with that whine. Pointing fingers is so 2nd grade.

EDIT: ANY posts that take potshots at mining is the same thing as the elitism on hardware topic. No matter how generalized you word it, that underlying stab in the balls still tickles a bit.

@R-T-B theft at such factories has always been a problem, low wages and poverty tend to make things like this almost a necessity to feed ones family.

 

[lexluthermiester]

A sign of the times indeed, when secretive, smuggling boats add NVIDIA CMP graphics cards to their cargo instead of other illegal goods.

One has to wonder how much of this is going on elsewhere? I'd bet quite a bit...

 

[MarsM4N]

People who think assembly workers where smuggling these GPU's out in their pants, very funny.

These workers sit on assembly lines (like chicken batteries), overseer in their backs, no special peepee brakes, and most likely pat downs at shift end. And most of them come from far away & live in tiny multy bed dorms, with barely enough space to store their little belongings. To get some impression of their working conditions, watch the following clip.

However I did find a very plausible explanation for the GPU smuggling over at videocardz.com :

Quote: "Earlier this year some regions in China have imposed a ban on mining farms, which were profiting from very cheap electricity. A sudden surge of mining operations in regions such as Inner Mongolia has caused a sudden spike in electricity demand. It was previously estimated that nearly 65% of the global mining power requirement is supplied by China alone. As a result, those regions have banned crypto-mining operations and authorities have ordered all existing farms to be closed. The site does not report why those particular cards were seized, but the regional ban on mining might have something to do with it."

So I do suspect that a huge part of the produced GPU's end up in these chinese mining farms and don't even make their way into the (international) consumer market.

 

[mak1skav]

Decentralized digital currencies are and were always going to be manna from heaven for the black market, so this shit will go hand in hand with the goods that create the wealth.

If you have mined, this is your fault.

I will have to repeat myself one more time I guess :

"FIAT currencies are used in black market, money laundering and various other criminal activities for so many years so I guess you don't support those too. You only trade for your food right? Supreme logic you have over there mate. Haters gonna hate."

 

[Caring1]

Supreme logic you have over there mate. Haters gonna hate."

I agree, his logic is far superior to your failed logic, and hater's gotta hate that.
It seems to have hit a nerve with even those that mine part time for their own selfish wants.

 

[Tsukiyomi91]

inside job.

 

[LemmingOverlord]

I'm surprised that the tech community, in particular tech journalists, are yet to unravel why there is a shortage as bad as it currently is. You can point fingers at the "work from home" situation, two strong console launches, freak acts of God, etc..., but wafer starts should be your first lead. Look at wafer starts at TSMC and Samsung, take away the official defect numbers, then look at the sales from Nvidia and AMD, then you'll finger out just how much is going to mining.

This won't get any better with Intel, either. Intel has no node that is capable of competing with TSMC or Samsung (yet), so it'll rely on the same two providers and further split the supply of wafers. They could go with their 14nm+++++++++++ solutions, but they'll get wrecked and the Raja-powered GPUs will be stillborn.

 

[80-watt Hamster]

I'm surprised that the tech community, in particular tech journalists, are yet to unravel why there is a shortage as bad as it currently is. You can point fingers at the "work from home" situation, two strong console launches, freak acts of God, etc..., but wafer starts should be your first lead. Look at wafer starts at TSMC and Samsung, take away the official defect numbers, then look at the sales from Nvidia and AMD, then you'll finger out just how much is going to mining.

This won't get any better with Intel, either. Intel has no node that is capable of competing with TSMC or Samsung (yet), so it'll rely on the same two providers and further split the supply of wafers. They could go with their 14nm+++++++++++ solutions, but they'll get wrecked and the Raja-powered GPUs will be stillborn.

Our story-focused brains want a bad guy; something/someone to blame. So the culprit keeps shifting based on whatever hypothesis managed to get traction this week. Like basically anything else, it's a confluence of factors. In this case, we have: production issues, supply chain disruptions, historically high consumer demand, a crypto boom, and probably more I'm forgetting.

In a way, it's kind of like the TP/bogroll shortage in the US at the beginning of the pandemic. Nobody was pooping more, but a few (relatively speaking) people panicked and bought way more than they needed. This helped spur a LOT of people to buy a little more than they needed. Since supply chains are so heavily optimized, stock got wiped out pretty quickly, so suddenly almost everyone's grabbing some as soon as it came on the shelf, so said shelves were always empty. Eventually enough folks got their supply to what they considered a comfortable level, so supply leveled out and it's been perfectly easy for awhile now to get as much TP as you like, whenever you like. Lather, rinse, repeat with hand sanitizer, liquid soap, flour, yeast, paper towels and now canning supplies.

Each factor is only part of the story. It's likely true that without the crypto craze, things wouldn't be as bad as they are, but I'd wager we'd still be seeing higher-than-MSRP pricing. As far as individual culpability in this whole debacle, one can look at it like this: I'm not going to vilify or scold anyone for running Nicehash to make a few $REGIONALCURRENCY. However, to claim one's participation isn't contributing at all is a bit like saying marine pollution isn't your fault because you only throw one bottle in the ocean a year. Confession time: I'm arguing with myself about whether or not to grab some BTC/ETH at the next ... crash, for lack of a better word. Pricing seems to follow a curve roughly shaped like a rising sawtooth wave, so it seems like a pretty decent bet. But then I'm also fueling the fire.

Tinfoil hat moment: A not-implausible theory is that some Russian and Chinese operations are state-sponsored as part of a strategy to get the world off of USD as a reserve currency.