Lenovo, ZTE shares plunge following report on Chinese spy chips

The share price for Lenovo has been triggered by investor’s sentiment due to the firm's exposure in the sale of its goods in the US.

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Chinese computer maker Lenovo saw its shares slump to around 20 percent on Friday morning, following a Bloomberg investigative report which uncovered evidence that showed that tiny chips in China-manufactured US computer equipment were stealing US technology secrets.

ZTE Corp, Chinese telecommunications firm also saw its shares shrink as much as 14 percent in early morning trading in Hong Kong.

As at 2.15pm, Hong Kong time, Lenovo was trading 14.60 percent lower, at HK$5.10, and was the third most traded stock for the day with a turnover of HK$1.72 billion on the Hong Kong Stock Exchange. ZTE shares also traded lower, down 10.42 percent, at HK$12.72.

The Bloomberg news article said its three-year secret investigation found that the chips – the size of a grain of rice each - were used on equipment made for Amazon, Apple, and possibly for other companies.

The chip allowed a “hardware-based” hack into computer equipment, which is usually harder to detect compared to a software hack, Bloomberg reported.

Based on the most recent fiscal year, three quarters or 75 percent of Lenovo’s revenue comes from outside of China, with more than 30 percent of contributions from North America.

Although the report did not reveal which Chinese tech firms were involved, analysts said the share price for Lenovo has been triggered by investor’s sentiment due to the firm’s exposure in the sale of its goods in that region.

In a response to queries from media outlets, Apple and Amazon said that they have never found any “malicious chips” in their systems.

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