To the layman, a chip may be just a chip but its utility is more than just making your smartphone work. Even screens, external slots, camera and other attachments have enough hardware capability on them to act as potential hack vectors. There have been multiple researches on this point that a simple chip replacement or addition can compromise your smartphone significantly. The major source of such hacks have undoubtedly been the mobile repair centers. More so in India than anywhere else, there is a workaround presented for any hardware glitch. Glitches that the manufacturers themselves never claim to fix. Your iPhone charging port goes wrong; the authorized service centers only offer to replace the phone at a staggering cost whereas a local market guy will replace the charging port for $10.
The source of these replacement parts are unknown, all the repair centers know is that they get it without any branding or packaging but they have good results. In what researchers are calling the “chip-in-the-middle-attack”, a screen replacement is demonstrated with an exactly original like screen replacement with an add-on chip that compromises the communication system of the device. In a demonstration video, it has also been shown that how the chip can power off the display and perform notorious tasks like taking pictures, logging behavior and patterns and streaming camera feed to the attacker. This is indeed an upcoming risk originating in hostile nations that are manufacturing replacement parts are selling them for practically no money because the cost of data that they receive in return is unimaginable. This chip in the middle attack is a newly coined term but such illicit activities have been going on since a long time. Counterfeit SIM slots with phony IMEIs have been found in stolen phones which led to major busts in this underground mafia of cell phone thefts.
As a point of caution and awareness, one must make sure that when something goes wrong with their devices, they approach an authorized service center to get them repaired and always make sure to wipe your phone clean before giving it for repairs because there are also cases where these technicians have copied data from mobiles that are given for repair and when they find that one whatsapp video to earn money, they will go to any extent. In one case, where private pictures of a couple were sold at a pan shop for Rs. 10 per picture.