Chinese Customs Seize 5,840 Illegally Mislabeled XFX GPUs Worth Over $3 Million

Chinese customs authorities seized 5,840 XFX graphics cards on Friday. The GPUs were moving through Huanggang Port, in Shenzen, the transit point for people, vehicles, and goods leaving and returning to Hong Kong (Lok Ma Chau). Customs inspectors noticed that a consignment of graphics cards had several mislabeled boxes. Further investigation revealed that the total value of the graphics cards in transit was $3 million more than declared by XFX's paperwork.

Considering this story as written by the Chinese customs authority on its Weibo account, one might presume it was a simple but unsuccessful attempt by XFX to reduce the customs duty it would have had to pay to send its goods from the Hong Kong Special Administrative Region (low taxation) to mainland China. However, this might not be an open-and-shut case.

Chinese tech news site MyDrivers shares an interesting supplementary rumor, which might cast a new light on the import duty dodging story. The publication claims that XFX has a history of supplying consumer graphics cards direct to crypto miners, and sometimes these are taken back by XFX and sold on as new products.

If XFX is still involved in passing new GPUs to miners and then repackaging and reselling them later, this could be why some of the shipment boxes weren't labeled correctly and undervalued. The problem, of course, is whether XFX sells the used cards to informed and willing customers or the company subsequently sells them as new.

The source also noticed that, in the wake of the Chinese customs seizure, the XFX China website seemed to be closed, as did XFX's Tmall online flagship store. Perhaps the customs investigators wanted to stop sales as they worked along the distribution chain to check for further irregularities.

There are a couple of positives that we might take from the story. First of all, it shows that customs agents display a good level of curiosity concerning the specs of PC technology products like graphics cards. Secondly, the dispatch of these 5,840 graphics cards to China, with its harsh laws on crypto mining, and trading, is suitable for PC gamers there. It certainly looks like these cards were on their way to regular PC gamers in China before being stalled due to XFX's mislabeling.

Last but not least, this story is another sign that miners are deciding to offload consumer GPUs, helping bolster supplies for consumers and pushing down prices.