Computer Chip Sabotage
 

Is this possible?

Say you farmed your computer chip manufacturing to where it was cheap, and when you received a shipment you ran a few through the tester and they worked fine.

Could there be an entire layer of circuitry, essentially another chip piggy-backed on that chip, that could be used to, oh, say, give an outside power the ability to 'listen in' and monitor or to take over any machine using that chip?

there is a process where die is stacked within a package so you have layers of circuitry that builds ontop of itself and is bonded out to the package itself.

this process is used mostly for space savings though. never thought of it for anything else.

What kind of tester are we talking about? If you're just plugging the chip in and running all the commands it can handle to see if it responds properly, and running some nonexistent commands to see if it errors properly...I can certainly imagine someone sneaking in some other functions. I imagine that most chips are severely limited by the circuitry and software around them, though, which wouldn't support the added Big Brother functionality.

Additionally, the cost and effort involved in redesigning the chip that you've been hired to manufacture would probably result in the project not being worthwhile unless the manufacturer happens to know that the chip will be used for some super-sensitive purpose that could provide them a huge opportunity.

Got a specific scenario in mind?

I would think that kind of malicious activity could be better executed by a motherboard manufacturer. Just program the bios to take audio from the sound card and send it to a specific IP address. Wouldn't even have to use the processor for anything.

The problem with adding things like that to the processor is motherboard support. You could only really add an instruction set to the processor that gets activated by software somehow.

Motherboard is definitely a better way to go. Spying or taking control with just the CPU would be tricky. If you knew what OS you were targeting it'd make it a lot easier. Since you need to communicate with the outside world via unknown hardware, you have to be high level anyway. Besides, you couldn't just record and transmit all the raw data passing through the CPU as it'd be too much! None of that makes it impossible, but it would be a lot of work. If it were me, I'd have the CPU hack bypass the OS's security and then download and install software to do all the actual spying.

What's the scenario here? If you want to spy on random people or have zombie machines regular old viruses would fit the bill. If going after specific targets, I'd think trying to intervene in some other manner would be easier.

It's been shown that an outside observer can determine the image being displayed on a monitor (CRT or LCD) just by the pattern of radio interference the display is producing. Meaning, there's no need for a piggybacked chip to observe. Of course, that brand of observation has range limitations, but they're probably not much worse than what you would get with a radio transmitter built small enough to piggyback on a microprocessor.
Taking over control of a machine via such a chip would be possible in theory, but without some kind of pre-programmed software to run, the "outside power" would have to radio in the program processor command by processor command, which would be excruciatingly slow.

Really, given the swiss cheese security present in most operating systems, there's no need for a compromised chip... Anything connected to the internet is fair game for someone with the proper skill sets.
Further, if you can't keep the computer physically locked up and/or under observation at all times, an "outside power" could show up, clone the HD of the computer and, at their leisure, do anything they want to the copy examination-wise. A modified copy could then similarly be reinstalled, providing outside access or monitoring while retaining the complete appearance and functionality of the original operating system.

No data is safe if you can get to the drive physically.

I actually have a 5" floppy drive that I put data on that I want nobody to be able to read, easily.

I think this is somewhat related... We did this to Iraq years ago. For some reason Saddam Hussein was buying computer printers from us. The CIA had modified some printers in a shipment so that when the printers were connected to a computer, the printer installed a virus on the computer, and then it would replicate and spread to other machines networked to it. Quite cleaver I think...

(I think that printer virus story originated in the April edition of some publication or other...)