Want to buy a re-marked 3.6GHz Pentium 4 chip for $78?

Shenzhen Chuanghui Electronics Co. isn't shy about offering re-marked Intel processors for sale: the company is openly selling them through a major Chinese Web site and brags that its re-marked Pentium 4 chips look just like the real thing.

Re-marking is a process whereby a processor is relabeled to look like a chip that offers better performance and has a greater value. The problem of re-marked processors isn't a new one for the chip industry but it has become less prevalent in recent years, particularly in more developed markets where efforts to crack down on the sale of re-marked chips have been successful.

That's little comfort for Intel, which has been plagued recently by the appearance of re-marked Pentium M processors in China. The chips, which were distributed as engineering samples to computer makers, were never meant to be sold to end-users, according to the company.

But the problem of re-marked Intel chips in China is not confined to re-marked samples of the Pentium M. In Chuanghui's case, the company has set up virtual storefronts on at least two online marketplaces, including Alibaba.com's Web site, to sell re-marked Celeron processors to overseas buyers.

The Chuanghui storefronts describe the re-marked chips as Celeron processors that have been altered to pass as 3.6GHz Pentium 4 processors and assure prospective customers that they look just like the real thing.

Intel is not amused. "That kind of behavior is not something that we tolerate or endorse," said Barbara Grimes, a spokeswoman for the chip maker in Hong Kong.

The re-marked processors that Chuanghui sells are actually 1.7GHz Celeron chips and are currently available for $78 each, including a motherboard, in quantities of 100 or more, said James Zhan, a company representative named online as a contact for potential buyers.

By comparison, Intel sells the real thing for $401 in 1,000-unit quantities, without a motherboard, according to its most recent price list.

Passing off a Celeron as a Pentium 4 is not difficult to do as the two chips are based on the same basic design, according to a semiconductor executive in Taiwan familiar with the technical details of the two processors. The main difference between the two chips is that most of the on-chip memory cache has been disabled in the Celerons, the executive said.

Chuanghui handles the re-marking of the Celeron chips itself, Zhan said. In addition, the company provides buyers with software that masks the identify of the re-marked Celerons from a computer's BIOS and Microsoft's Windows XP operating system, fooling the software into believing the chip is actually a 3.6GHz Pentium 4 processor, he said.

Chuanghui began offering re-marked chips one year ago and now sells around 1,000 of them every month, primarily to buyers in Asia and Africa, Zhan said.

Based in Shenzhen, just across the border from Hong Kong, Chuanghui was established in 1997 and manufactures a range of electronics products, including computer motherboards that are sold under the KingJet brand. The company employs a staff of 500, according to its Web site, which claims the company is an Intel partner.

Zhan defended Chuanghui's sale of re-marked chips, saying the company makes no attempt to hide what had been done to the chips or to pass them off as a more valuable processor. "I tell them the truth," he said.

However, Zhan said Chuanghui has no control over how its customers represent the re-marked chips when they resell them.