I’ve written a few articles for EE Times recently about the problem the electronics industry faces with counterfeit parts. It’s serious, expensive, and by all indications the problem is getting worse.
One of those articles, entitled Poison in the Veins and published October 24, detailed the government’s case against two employees of VisionTech Components, a Clearwater, Florida-based independent distributor. Over the course of a few years, the government alleged, the company imported counterfeits from China that it sold to the U.S. Navy, defense contractors and others, marketing some of the products as “military grade.”
One of the charged VisionTech’s employees pleaded guilty in November 2010. The October 25, the day after the EE Times article was published, she was sentenced to 38 months in jail. It was the first federal prosecution in a case involving the trafficking of counterfeit semiconductors.
The VisionTech case revealed just how endemic the problem had become and how deeply the US military has been affected. The perceived threat to national security from counterfeit parts raised the hackles of Congress, and starting in early 2011 a number of House and Senate committees held hearing to determine the extent of the problem. And the Senate Armed Services Committee opened a formal investigation in March.
2011 was the year that counterfeiting became a national security issue. The gloved came off. The VisionTech case also revealed a flaw inherent in a US Customs and Border Patrol (CBP) policy commonly referred to as the “Redaction Policy.” The policy required CBP officers who share photos of suspected counterfeits with OCMs to black out all markings on the suspect chip beforehand. CBP claimed that sharing the markings would violate the US Trade Secrets Act. The Semiconductor Industry Association and others argued the CBP’s position was unjustified and testified to Congress that CBP’s redaction policy meant component manufacturers could not provide any meaningful feedback to CBP requests that would help them catch the bad guys.
EE Times documented all this in the October article. Our reporting found that the CBP was unique among government agencies in holding this position and was roundly criticized by industry. Its position just didn’t make any sense.
Evidence from the VisionTech case also revealed the role that China is playing in perpetuating counterfeits. The company’s counterfeits were sourced from either Hong Kong or the PRC. The Senate Armed Services Committee came to the same conclusion from its investigation: China was the worst offender.
In December, Senator Carl Levin, Chairman of the SSASC, and John McCain, the committee’s ranking minority member, co-authored an amendment to the 2012 Defense Appropriations Act that addressed the counterfeit issue head on. Among other things, it included a section authorizing the Secretary of Treasury to require CBP to…
“share information appearing on, and unredacted samples of, products and their packaging and labels, or photographs of such products, packaging and labels, with the rightsholders of the trademarks suspected of being copied or simulated, for the purposes of determining whether the products are prohibited from importation…”
President Obama signed the NDAA into law on December 31. It included the language Levin and McCain wrote.
By bringing this issue to the public’s attention when we did, EE Times would like to think we played a role, however small, in influencing legislation that corrected a flaw the system. The fight against counterfeits is far from over but EE Times would like to think we helped made a difference.
-- Bruce Rayner is a contributing editor to EE Times
Branded food is not very difficult to avoid; a fresh carrot or fresh meat joint are pretty obviously fresh; freeze them and they could have travelled further and have unknown origins. Package them as ingredients and who knows?
With chips and components there is a system of CoCs that can provide a degree of assurance, but buyers must resist the temptation to buy on the grey market.
Some manufacturers will respond to structured requests for obsolete components, last time buys and so on, but clearly they can't carry chip stocks forever, so legacy part orders need to be coordinated, which means cooperation between buyers with a common interest. Tough to organize.
Single source parts and sudden shortages of popular parts are what drive buyers to the grey market, so designers should provide alternate getouts for such designs or at least alert their buyers which parts should be on the Critical list.
Managers should check through the design BOM asking where the supply chain is vulnerable, and compare the cost of a few extra design precautions against loss of production or being forced to buy grey products?
In my experience this extra time often results in an improved design that recoups the cost of the work in production savings.
@Bruce Rayner: I do believe EE Times made a difference by highlighting the counterfeiting issue. How ever, I think the proof is in enforcement -to that end, there is only limited reach of what the US legal system can do. Thousands, if not, millions of products assembled overseas may make it to US destinations as finished goods with counterfeit parts in them. The problem needs a truly global cooperation in enforcement and I remain skeptical on this.
What we have seen in enforcement is the tip of the iceberg but a good start nonetheless!
The industry must take serious steps to counter fakes.
Give each part a serial number which is hardcoded into the silicon. Use something like Maxim's 1-wire protocol to access it. This unique read-only memory must be as cheap as humanly possible to integrate.
The manufacturer has a website where each searial lookup is recorded so that consequent lookups show all historical lookups. A normal part should then show expected lookups at more or less of these stages: wafer level test, packaged chip test, PCBA test, finished product test.
If a serial number shows up with a large amount of lookups, it's likely to be the template used in a fake. And obviously, if the chip has no serial number or an incorrect checksum, the part should be dismissed altogether.
It is surprising to know only two persons got punished. Should not organization should get punished as whole? Country of origin for part is very important and one should not use this part of parts in their design.
As harsh as this may sound, putting the manufacture of many of our high tech IC's into facilities in other countries provides greater opportunities for counterfeiting by other firms in those countries. We need to make more of those products back in the USA, and to put tight controls on their manufacture and distribution if we really want to attack the counterfeit problem. Otherwise, the rewards to counterfeiters so far outweigh any risks to them. The risk falls to the user who in many cases has no way of knowing whether or not the part is genuine.