HP has secure chips in every cartridge as well. They use a processor from Infineon which is EAL5 security certified (the highest security certification). These are the same chips you may have in your banking cards. The last metal layer of this chip is a mesh of wires covering the whole surface transmitting random signals at one end and comparing the phase of this signals at the other end. This prevents you to edit the chip with a FIB. Then every bus in the chip is scrambled, variable number of wait states are inserted in I/O operations and during these wait states random signals are send on the CPU bus. They have light sensors, voltage sensors and clock domain sensors which erase keys if they are triggered. All of the above and some more anti-hacking measures make the reverse engineering extremely difficult. And you get all of the above for the cost of 0.30$ per chip (in quantities).
These secure processors do 2 things: they authenticate to the printer with full handshake using strong encryption and they watch the level of ink in the cartridge (they record the transparency of each ink when the cartridge passes in front of a reflective light sensor) and they stop the moment they see more ink that is was before.
You can see how the economics works here: let's put a 30 cents chip in every cartridge and then have a markup price of 20$ or more. Multiply that with the number of cartridges you need to change simultaneously and you'll get the idea.
