Newegg terminates supplier relationship over counterfeit Core i7 CPUs
By Sean Hollister 
posted Mar 8th 2010 8:58PM
posted Mar 8th 2010 8:58PM
This weekend, up to 300 Newegg customers who pulled the trigger on a new Intel Core i7-920 processor found themselves puzzling over a clever fake instead. Who's to blame? It's not exactly clear -- Newegg initially said that the processors were "demo units," but has now posted a statement to Facebook saying that supplier IPEX shipped counterfeit chips and has had its contract revoked. That's good news for D&H Distributing, another Newegg supplier that responded to an initial wave of finger-pointing by issuing legal nastygrams to sites covering the story, thus ruining whatever good vibes the truth's generated.Finally, here's the statement Intel just sent us, explaining in no uncertain terms that these are counterfeit parts:
No matter who's at fault here, the damage has been done. We'll never build another PC without losing precious seconds carefully examining its CPU first."Intel has been made aware of a limited number of counterfeit i7 920 packages in the marketplace, specifically Newegg, and is working to how many and/or where they are being sold. The examples we have seen are not Intel products but are counterfeits. Buyers should contact their place of purchase for a replacement and/or should contact their local law enforcement agency if the place of purchase refuses to help.
Intel is getting samples to inspect and until then we can say that everything in the package appears fake. Some of the photos of the processor look like it is a casting and not even a real processor of any kind. Newegg has moved quickly to replace the suspect units."
[Thanks, Cody C.]
Nicely done, Sean!
@Joshua Topolsky
I agree, good read.
@Joshua Topolsky
Totally agree. Last comment is hilarious.
I've seen a bunch of people getting serious about this story. Come on, guys, it's not like newegg did this on purpose, hoping no one would notice. Out of 300 people, someone is bound to realize their computer is not booting.
Whoever really made those fake CPUs, is about to get legally bitchslapped by Intel.
@Prevacator I doubt it, you would have to catch them first.
Legal action is not going to be a surprise to them (its a plastic block and the CPU didn't even have pins on it after all).
@Ducman69
Intel has the money. And someone was trying to sell counterfeits of their precious i7 line.
I think a few assassinations might be coming...
@Ducman69 i7 is an LGA chip, the CPU isn't supposed to have pins.
@jarek It didn't have any pin contacts. I can't tell whether you were being unaware of the situation or a smartass.
@Khalid Shahin A smartass.
@Prevacator
Most likely it came from one of the few countries that have no respect of the concept of intellectual property.
@paul34 Somalian pirates likely.
@paul34 Like the US? Your IP system is a joke..
@paul34 The United States?
@Johanu
Maybe you should try to comprehend what a comment is saying before throwing around the USA hate? Our IP system is a joke, but in the complete opposite way of what paul34 was saying. We give waaaay too much 'respect' to IP. Mostly because IP holders convince legislators to give them "respect". He was implying they probably came from somewhere like China, which generally doesn't give two craps about anyone's copyright or IP unless they are from China.
@Prevacator
you mean iSuicides
@Prevacator Wow...after seeing a video of the fakes it's not even vaguely believable...how the heck did nobody realize how fake these were.
At first I was impressed that someone had managed to counterfeit a working copy of the i7 that was compatible, but this is clearly not the case.
I assume that IPEX got scammed themselves, since I doubt that they would have believed that nobody would notice that the CPUs were chunks of metal with no pin outs.
BTW, while D&H might sic'ed the legal team on websites a little aggressively I'd be pretty pissed if people were posting untrue rumors about me all over the internet when it's the other supplier at fault. If you've worked hard to make sure that nothing you sell is counterfeit and there's lots of websites claiming that you've been providing newegg with counterfeits it's pretty easy to see why you'd be pretty damned angry.
What I don't really understand is why a vendor the size of Newegg has to order its CPU's from shady third party distributors. Can't they just place orders directly with Intel?
Anyone up to date on how this world works?
@scoobydooby
Cheapest price wins.
@scoobydooby Manufacturer supplies Wholesalers, Wholesalers supply Retailers.
Newegg is a Retailer. I don't think even Newegg does enough volume to have a direct relationship with Intel.
@scoobydooby
LOL. Shady? I'm not really sure you have any information on the suppliers as to who's shady and who's not. Most likely it's not IPEX's fault either- but since this story has been blown out of proportion, someone needs to be blamed. It's not in any supplier's interest to send counterfeit products since it can be tracked and in such cases, punishment and revoking of contracts can be issued. Most likely, it was one or two inventory workers with a grudge or thought they wouldn't be caught and tried to make some money. Either way- think before you react.
@scoobydooby
Newegg is essentially a big warehouse distributor. The only way to buy directly from intel is to pay alot higher prices and some licensing fees. Its cheaper to order the products from someone else who has already assumed the fees and whatnot. Thats how the world works. Unfortunately, unless you REALLY know your distributor, this is the kinda thing that can and does happen.
@mp3
If cheapest price wins, why is D&H getting the nod? Fuck those guys, they charge more than retail for half the shit they sell.
@mp3
If cheapest price wins, why does D&H get the nod? They charge more than retail for half their crap.
@trendscenedental
Whoops, double post. First one didnt show up, I thought it may have been filtered since I said "fuck" in it.
@trendscenedental I worked with D&H for years. They are, hands down, the best distributor out there and I recommend them to anyone. If you're a small fish, you'll need to build your way up to better pricing but that's a common practice. You don't get to come in and have great pricing. They need to protect their vendors' (the manufacturers) street prices. Prove you can bring something to the table other than ridiculously low prices and your margin will increase.
If you believe you've proven yourself and your margin hasn't increased, you're doing something wrong in dealing with them. If you haven't proven you can move product in volume, don't be surprised if they're (or anyone else, for that matter) not bending over backwards to help you. They won't give you better prices because giving you more margin won't help if you won't change what you're doing! They'll just assume you've got no other play than simply undercutting everyone else. And that's not a sustainable business strategy for everyone else. And everyone else matters more than you do until you prove to them otherwise.
D&H is good people. I'm sorry your experience hasn't been better with them but they are good people across the board. And, no, I do not work for them and never have. Just with them.
This has blown WAAAY out of proportion. A few people received counterfeit processors. Newegg.com quickly send out legitimate processors. End. Of. Story. It actually shouldn't have been such a big deal. I'm guessing there just wasn't enough tech news in the day so this story was picked up. Either way- let's move on.
@think before you react
I'd say the thing got out of proportions when cease and desists were sent to bloggers for mentioning the name of the reseller Newegg initially implicated. Hence the "shady" naming. Of course, as it turned out, Newegg actually blamed the wrong company...
@scoobydooby - As you said, it makes sense that the cease and desist letters were sent out - they weren't to blame and got a LOT of bad press for it.
Good on Newegg for terminating the contract right away with IPEX.
could someone benchmark them, and tell us the difference... You might want to make sure it isn't twice as fast as it's suppose to be before returning it(i know it won't be, but still)...
@Nimer55 they are not processors at all...just a hunk of metal
@Nimer55
Is dat sum sarcasm?
The counterfeits didn't even have pins on them.
@tenio
awww... Then i don't think a benchmark is needed...
Sorry i didn't read the whole thing...
@Kulahan LGA processors don't have pins on them.
@eddieexe
Oh? Well... that's interesting. Guess I've got some reading to do : /
@eddieexe It didn't have any pin contacts.
"should contact their local law enforcement agency if the place of purchase refuses to help."
Man, Intel's making this pretty srs bsns. I half thought they'd just leave it up to the people actually selling the counterfeits to deal with it.
Lmao, the guys who made the counterfeit processors are probably reading this now.
People are naive if they think NE pull such BS themselve. They got all of their product from their supplier.
smart move
So it would appear as though...
*Puts on sunglasses*
We have finally come across some INTEL.
YYYYYEEEEEAAAAAHHHH!!!
http://www.youtube.com/watch?v=fjRG2530rwI
@Nitesh LOL nice one
@Nitesh
so full of win. +1 internet to you good sir.
@Nitesh
Brilliant. Would lulz again.
@weirdo557 If you really want to give me internets:
http://internetometer.com/give/10166
@Nitesh epic. wish I had ovaries so I could have your babies. bravo.
@Nitesh YEAAAAAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Well played! Didn't see that coming here!
Sounds like the fake Kingston MicroSD card game.
It'll trace back to a dodgy Chinese factory.
further investigation by intel reveals that those CPU are actually their latest packaging method...
It appears those slamming newegg in the previous post for issuing takedown notices spoke too soon... It was the supplier, the first article didn't make it clear either way.
@AltairDusk The info was clear in the previous article, just engadget muddled it in their summary.
Previous link:
http://hothardware.com/News/Newegg-Ships-Fake-Intel-Chips-Supplier-Threatens-Journalists-For-Reporting-It/
'As of today, the two websites that reported on the problem—[H]ardOCP and Icrontic—have been hit by a cease-and-desist letter courtesy of D&H Distributing.'