U.S. Navy Bought 59000 Fake Chinese Microchips

Yikes -- Last year, the U.S. Navy bought 59,000 microchips for use in everything from missiles to transponders and all of them turned out to be counterfeits from China. Wired reports the chips weren't only low-quality fakes, they had been made with a 'back-door' and could have been remotely shut down at any time.

If left undiscovered the result could have rendered useless U.S. missiles and killed the signal from aircraft that tells everyone whether it's friend or foe. Apparently foreign chip makers are often better at making cheap microchips and U.S. defense contractors are loathe to pass up the better deal.

The problem remains with these "trojan-horse" circuits that can be built into the chip and are almost impossible to detect -- especially without the original plans to compare them to. The Intelligence Advanced Research Projects Agency (IARPA) is now looking for ways to check the chips to make sure they haven't been hacked in the production process.