A chip which was built in China for the US military chip came with a backdoor which made it vulnerable to "IP theft, fraud and Trojans".
Insecurity experts at Cambridge University found that a microprocessor used by the US military but made in China contains secret remote access capability.
Apparently a secret "backdoor" that means it can be shut off or reprogrammed without the user knowing.
Cambridge University's Computing Laboratory has not named the chip but said it was widely used in military and industrial applications.
All Chinese spooks have to do is flick a switch and the PC is p0wned at a chip level. From there they can do pretty much what they like.
The discovery was made during testing of a new technique to extract the encryption key from chips which was being developed by Cambridge spin-off Quo Vadis. There is no way to fix the bug and the chip must be replaced.
Cambridge University researcher Sergei Skorobogatov and Quo Vadis Labs research Christopher Woods wrote that the discovery of a backdoor in a military grade chip raises some serious questions about hardware assurance in the semiconductor industry.
The report added that the discovery also raises some questions about the integrity of manufacturers making claims about the security of their products without independent testing.
Large numbers of chips are made within China and shipped out to the west.