Martin Wood was closing up his computer-products business recently when seven men stormed through the front door, pushed him to the floor and put a gun to his head.
This wasn’t a random hit. Wood said the robbers used a police scanner, carried walkie-talkies and knew exactly what they were looking for-tiny chips called dynamic random access memory, or DRAM, which make it possible for computers to save files that are actively being worked on.
“You can fit a million dollars’ worth of DRAM in the back of your car. You can’t do that with gold or VCRs,” said Wood, of Delkin Devices Inc. in Serra Mesa, Calif.
Computer-chip robberies and thefts are on the rise because these tiny pieces of electronic wizardry represent the perfect contraband. They’re small, valuable, easy to sell and nearly impossible to trace.
Few perpetrators are caught in the act. Within hours, the stolen parts make their way into the “gray market,” a loose association of brokers who sell products outside the normal channels of distribution.
Some of these parts go to computer makers in Asia, who distinguish their products largely on price.
Others make their way to small U.S. companies unable to buy in volume directly from a supplier. Others are pawned off at swap meets.
“These guys are organized, and they know exactly what they’re doing. When they break into a company, they’re going in to fill an order,” said Michael McQuade, senior vice president of the American Electronics Association.
This is a lucrative business.
One of Intel Corp.’s fastest Pentium chips could fetch as much as $1,000 from the right buyer. A typical four-megabyte memory-chip module sells for $200 apiece.
And with many computer parts such as DRAM in short supply, there are plenty of customers willing to pay in cash and not ask questions.
The problem is increasingly acute in Orange County, Calif., which is home to some of the world’s largest computer-products manufacturers.
What scares industry insiders is not only the increased frequency with which these robberies occur, but the sophistication and violence used in the attacks.
Robbers are armed with automatic weapons. They tie up their victims and kick or beat them into submission.
The hits are brazen, sometimes occurring during broad daylight. And the thieves know enough to steal only the most expensive products, along with customer invoices that provide the names and addresses of their next victims.
Delkin, for example, was hit within weeks of a similar attack on one of its suppliers, G&G Assemblers in Huntington Beach, Calif.
“It’s not like we have a recognized name. It would have been difficult for them to know where we were without an invoice,” Wood said.
Product manufacturers aren’t the only victims. A Boston computer-rental firm was victimized in December when thieves smashed its computers to steal the parts inside, said McQuade of the American Electronics Association.
The potential threat of attack is having sobering effects on an industry known for its high growth rates and future promise.
Wood keeps a gun in his desk drawer. He installed a security system with sensor pads and infrared beams and refuses to hire anyone with a long history in the memory-chip business, fearing unscrupulous contacts.
Others have hired armed security guards and erected high security fences around loading docks.
Most companies refuse to discuss the problem for fear that a mention in the newspaper will increase their chances of getting hit.
To tackle the problem, the American Electronics Association and the Chubb Group of insurance companies have been holding seminars to educate companies about what they can do to prevent a robbery.
Santa Clara, Calif.-based Intel, which makes the chips that run a majority of the world’s personal computers, last year began imprinting serial numbers on some of its Pentium chips.
If these chips were stolen, the police or potential customers would be equipped with a means to recognize the parts.
Though the serial-number program could curb thefts of microprocessors, it’s not practical for smaller components such as memory chips.
These chips are often too small to accommodate a number and are sold in such large volumes that they’d be difficult to track.
