Apple suppliers took an $18 billion stock hit after Bloomberg’s disputed China hacking report

“Thursday’s report from Bloomberg Businessweek that Chinese chips were installed in the hardware of companies like Apple and Amazon.com could have significant implications for tech supply chains,” Al Root reports for Barron’s.

“Consider: Apple is a $1 trillion company, and its hardware supply chain amounts to another trillion or so in market cap. Those companies have about $1 trillion in assets listed on the books,” Root reports. “Though it’s difficult to get precise numbers, Apple’s suppliers domiciled outside Southeast Asia probably own about $300 billion in assets there.”

“If the security zeitgeist begins to require more technology production to be done in the U.S., the implied shift in capital spending by the region could be material,” Root reports. “The market, however, has taken just $18 billion or so in value from the hardware suppliers since the story broke… with Taiwan Semiconductor Manufacturing, down 3.5% to $42.43, among the hardest hit.”

Read more in the full article here.

MacDailyNews Take: Apple and Amazon should sue Bloomberg Businessweek to the point of much pain and make an example of them.

SEE ALSO:
UK cyber security agency backs Apple, Amazon China hack denials – October 5, 2018
Apple official statement: What Bloomberg Businessweek got wrong about Apple – October 5, 2018
Apple strongly disputes Bloomberg BusinessWeek report that Chinese ‘spy’ chips were found in iCloud servers – October 4, 2018

8 Comments

  1. The story had nothing to do with Apple’s suppliers that make Apple’s products. It purportedly had to do with a company that Apple bought servers from, as a customer. Servers that might have been used for a few months in 2015, at server farms that were meant to speed up Siri. Completely separate from Apple’s supply chain. Of course, this has all been denied by Apple as fiction, but even if it were true, it’s extremely limited in its impact and nothing to do with its products and supply chain.

    1. Sounds to me like MDN themselves didn’t even read the complete, very thorough and very detailed report. If it is made up, then a hell of alot of detail and technical information was “made up”. Its hard to believe after reading it. Maybe specific details of what actually happened at Apple & AWS are disputable, but the act of sabotaging Supermicro motherboards as described is feasible.

      If there really are top secret investigations and this is related to spy activity, does anyone really expect Apple, AWS or Supermicro to own up to it ? I would expect they would be asked by FBI or whomever to keep it completely under wraps for “reasons of national security”, at least while investigations are still ongoing.

      1. Problem with your theory is that if Apple, AWS and/or Supermicro were asked by the FBI to keep this under wraps, that doesn’t just apply to some faceless business entity, but all those people “in-the-know”, meaning those so-called sources.

        While I found the story fascinating and I don’t doubt countries like China and Russia and others, remember French intelligence bugging AirFrance business section seats to get business information, would do something like this, if one looks carefully at what was reported about Apple, it’s very, very thinly sourced. It’s alot of 2+2 might equal 4. Supposedly Apple placed orders for 6000 Supermicro servers in 2014. In May of 2015, Apple engineers supposedly found oddities in some servers. Shortly thereafter 7000 servers were removed, and in 2016 the contract with Supermicro was terminated. As Gruber questioned, why did it take Apple until 2016 to terminate a contract from a company that had done what Supermicro was supposedly doing? Seems strange to wait so long.

        And, that, pretty much is the gist of the Apple part of the story. Not that much hard detail, with very few sources. There’s alot of other stuff, but that’s not about Apple.

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