Newegg Fires Supplier IPEX in Fake Intel Chip Flap

Officials with online retailer Newegg have terminated their relationship with a supplier, IPEX, which they said was the source of counterfeit Intel Core i7-920 processors. Intel officials also are investigating the incident.

Online technology retailer Newegg has terminated the contract of one its suppliers, IPEX, which Newegg officials said had shipped them bogus Intel processors.

The counterfeit processors, which reportedly numbered as much as 300, were first reported online March 5 by the Website HardOCP.

Initially sources told the Website that D&H Distributing was the supplier that sent Newegg the counterfeit Core i7-920 processors. However, in a statement late March 8, Newegg said the supplier was IPEX.

"Initial information we received from our supplier, IPEX, stated that they had mistakenly shipped us 'demo units.' We have since come to discover the CPUs were counterfeit and are terminating our relationship with this supplier," the Newegg statement said.

Newegg also made sure to clear up the confusion about D&H.

"Contrary to any speculation, D&H Distributing is not the vendor that supplied us with the Intel Core i7-920 CPUs in question," the statement read.

Newegg officials said they are sending out replacement chips to affected customers.

Intel officials also have said they are investigating the incident.

Problems with the products could be seen immediately. On the packaging of boxes containing the fake chips, there were several misspellings, including a sticker on the outside box that spelled "socket" as "sochet."

Inside the boxes, which were supposed to contain a stand-alone CPU, were fake processors and some other items. In addition, there were "instruction manuals" that contained only blank pages.

D&H officials took aggressive action after the initial reports surfaced naming them as the source of the counterfeit chips, including issuing a cease-and-desist order against HardOCP. HardOCP said on its Website that the source of the information about D&H came from within Newegg. HardOCP in the statement apologized to D&H and said it was investigating how it had gotten the conflicting information.