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thiagorulez
Most of these fakes are poorly refurbished products pulled from places like ...
Netteligent
Apple selling its well known apps, musics, videos for less than $5 or much less. ...
Ferreting out the fakes in the chip supply chain
Bruce Rayner
8/15/2011 9:01 AM EDT
The government is increasing the pressure on counterfeiters as part of its broader objective of cracking down on intellectual property violations. In March, the Obama administration issued a white paper that calls on Congress to strengthen the laws protecting IP. Specifically, the paper recommends increasing the statutory maximum prison term for economic espionage from 15 years to at least 20 years.
The U.S. Senate responded at the end of May by introducing legislation that targets rogue suppliers and Web sites that violate IP laws and sell counterfeit products. Vermont Democrat Patrick Leahy introduced the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011, which would empower the U.S. Department of Justice to take action against Web sites that infringe on IP and that sell or promote counterfeit goods.
If the bill becomes law, the Justice Department’s reach would extend to Web sites outside the United States and would include companies that do business with the offending Web sites.
But the government isn’t waiting for the passage of new legislation to ratchet up the pressure on counterfeiters.
In June, ICE’s National Intellectual Property Rights Coordination Center announced Operation Chain Reaction, targeting counterfeit parts in the supply chains of the Department of Defense and other U.S. government agencies.
The operation is a collaboration with eight other agencies, including the FBI; the Defense Criminal Investigative Service; the Defense Logistics Agency; and U.S. Army, Air Force and Navy investigative units.
“Pooling our resources will allow us to more effectively disrupt and dismantle criminal enterprises,” said James Burch, DOD deputy inspector general for investigations.
Focus on China
While Operation Chain Reaction has its sights trained on the nation’s borders to catch counterfeits as they enter the supply chain, the Senate Armed Services Committee is looking farther afield in a bid to stop counterfeiting at the source.
A group of investigators representing the committee had planned a March trip to Shenzhen, China, a short hop by train from Hong Kong, to investigate operations that have allegedly been supplying counterfeit components for U.S. weapons systems. According to sources, counterfeit parts that ultimately ended up in F-15 fighter jets and U.S. Missile Defense Agency systems had come from Shenzhen. But the Chinese government denied the investigators’ visa applications, asking that the team postpone its trip.
Senate Armed Services Committee chairman Carl Levin (D-Mich.) responded to the request by saying Chinese government officials could “not help themselves by denying access to their country for people on an official Senate mission.” Rather, Levin said, the action would “hurt them.”
Why the focus on China? And why Shenzhen? “Because between 75 and 80 percent of all counterfeit components come from China,” said ECIA president Robin Gray, “and most of those come from Shenzhen.”
Component makers agree, judging by the findings of the Commerce Department study. By a wide margin, China led the list of the top five sources of suspected or confirmed counterfeit parts as identified by respondents.
Source: "Defense Industrial Base Assessment:
Counterfeit Electronics," U.S. Department
of Commerce, 2010
Several factors make Shenzhen a hotbed of counterfeit activity. First, the city is a primary manufacturing hub for China’s vibrant electronics industry, hosting many of the largest international electronics companies. Second, it has a sophisticated network of independent electronics distributors and traders. And third, it has a ready supply of discarded electronic equipment, the source of many counterfeit parts.
The United Nations Environment Programme estimates that China is the second-largest generator of electronics waste, after the United States. Ground zero for China’s e-waste is Guiyu, Guangdong province, a four-hour drive west of Shenzhen along the South China Sea coast.
Some Guiyu residents scrape out a living dipping pc boards in open vats of acid to harvest components and reclaim metals such as lead, copper and gold from the boards. The materials make their way to cities like Shenzhen for refurbishment, repackaging and resale. Some of the packages are remarked, hidden in, say, karaoke machines and sold to unsuspecting buyers in the States.
Some shipments, such as the contraband-laden karaoke machines, are intercepted and seized before their substandard contents make it into the supply chain. But industry insiders increasingly fear that such cases are just the tip of a large and growing iceberg of counterfeits.
About the author
Bruce Rayner is founder and chief green officer at Athletes for a Fit Planet, and a contributing editor and Webcast host with EE Times.
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Cliff Keller
8/15/2011 3:55 PM EDT
I disagree with the tone of this article. It is actually very easy to avoid counterfeit and reused devices. Just buy the devices directly from the supplier or through franchised distributors. The problems come from buying through "gray market" sources to save a little money.
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maryl
8/15/2011 8:09 PM EDT
It is not always a matter of money. Sometimes the "gray market" is the only choice if you are supporting designs that require obsolete components when there are issues redesigning the product to use newer parts. I believe the article mentions this in relation to the military and aerospace industries.
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Etmax
8/15/2011 8:18 PM EDT
I'm sorry Cliff, but the author did cover what you said elaborating on how the parts make their way into the "official" channels. Yes most of it is grey market, but there are exceptions. Consider also that the semi companies now manufacture in china and distribute to the world from there. What makes you think that a country that puts melamine in baby milk resulting in kidney damage won't add a duds to the mix?
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ibm221
8/16/2011 3:32 AM EDT
this is devil, dude, and it's everywhere.
US president could also lie about his everything.
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pdudley
8/19/2011 2:25 PM EDT
That is like Miss America wanting "Peace on Earth" ....it's a real nice thought - but totally unrealistic!
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Zappers
8/16/2011 9:11 AM EDT
It is not only US where counterfeit portable memory chips are sold but all over the world. Memory Chips (especially upgraded ones which are originally 512Mb are sold as 2GB) are sold one third of the price of original 2GB memory Chips. I am almost postive that Asia consumes probably equally or even much more of these counterfeits than USA today!!!
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DrQuine
8/16/2011 10:00 AM EDT
A really effective means to secure the supply chain would have wide application across many industries. The same problem affects the pharmaceutical business where counterfeit pills sometimes manage to cross into the "legitimate" distribution channels.
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Dan.Deisz_#2
8/16/2011 11:03 AM EDT
Buy from Authorized Distributors first and then go to independents if there is no Authorized solution anywhere. Franchised does not mean Authorized necessarily. If buyers consistently want to buy based primarily on price or who they have worked with in the past, regardless if they are authorized, counterfeit will continue to grow. Rochester Electronics has over 500,000 obsolete device types. This obsolete product story along with many other Authorized providers/solutions means most of the obsolete market is covered very well. No excuses not to buy Authorized when that solution is available in my opinion.
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prabhakar_deosthali
8/17/2011 2:48 AM EDT
Buy from the supplier who is ready to take back his supplies if the parts are found to be fake. As long as this guarantee is given by the supplier, you don't have to worry if the supplier is an authorized distributor or an independent one
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Dan.Deisz_#2
8/17/2011 7:32 AM EDT
Except this requires YOU to figure out if you have a problem. You have to take on the burden of proof and risk to your product and schedules. Authorized sources with fully authorized product ensure no counterfeit.
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agk
8/17/2011 3:40 AM EDT
A difficult area to make counterfeits. Once at my work place we found that QC rejected whole lot of elctronic isolators as it was not meeting the production specifications. The samples were brought to us. We could not find any difference in the product when compared with the previous lot. but still they were failing. That was tested stage by stage and we found that an op amp was not performing as it should. Few samples were brought from the stocks in our stores. Examined under magnifier and found to be a fake one. While seeing the purchase records it was supplied by a dealer who is not an authorised for that brand. The part was again purchased from an authorised seller and all the isolators reworked with this part. Then it passed in the QC.
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McGookin
8/24/2011 1:29 PM EDT
I'm tasked with investigating just such situations for the FBI. I would love to receive tips like this at Cory.mcgookin@ic.fbi.gov
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AMPT/OEM-Sales
8/17/2011 10:15 AM EDT
Or partner with a reliable Independent Distributor like Advanced MP Technology which has all of the precautionary measures (laboratory-grade high-powered microscope, an X-ray inspection system, decapping capabilities, strict ISO 9001: 2008 & ISO AS9120:2009-A QC Procedures) in accordence with each of our individual customers stringent shipping and receiving requirments to ensure the authenticity of the product. www.linkedin.com/in/mikestifter
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RogerD_#2
8/17/2011 11:28 AM EDT
How much longer are we going to tolerate the inaction of the Chinese government to halt counterfeiting of all types - from ICs to Apple Stores?!?!?!? The Chinese authorities only give lip-service to the world's complaints about rampant counterfeiting, while at the same time allowing it with a wink and a nod - it's all about money folks, money=power, and the Chinese government is bound and determined to become the most powerful entity on the planet by whatever means necessary. You think China really cares about counterfeiting as long as it brings in profits to their country?? Don't be naive! China is the problem - and nobody is taking decisive action to stop them!
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Saturation
8/17/2011 3:11 PM EDT
A scary part is, and reiterated in this article, even if you buy from authorized distributors you can still get counterfeit instead. It seems in-house testing is the most foolproof way to spot them, and if they meet design specification, it won't matter if its counterfeit.
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mountaincore
8/17/2011 3:49 PM EDT
Accept that is rewards bad behavior.
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Dan.Deisz_#2
8/17/2011 6:26 PM EDT
Through most Authorized Distributors like my company (Rochester Electronics), it is not possible to get counterfeit. No returns and no grey market, only OCM product. In-house testing doesn't guarantee no counterfeit, this too is a huge variable. Buy Authorized is if available is still your best first step.
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McGookin
8/24/2011 1:32 PM EDT
It still matters. Buying counterfeit only helps the bad actors succeed and continue their ways. Ultimately it will matter a lot when lives are lost. Have a tip - email me - cory.mcgookin@ic.fbi.gov
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Cliff Keller
8/17/2011 3:39 PM EDT
Yes, you could even get bad parts direct from the Manufacturer. But, in the supply chain buying direct or through the franchised distributors drastically cuts the chances of getting bogus parts. Franchised distributors will be terminated by the supplier if they sell "gray market" devices, and that is too big a penalty for them to risk.
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elctrnx_lyf
8/18/2011 10:53 AM EDT
The recycling of electronic products is probably one reason for the fake components to enter the market. The only way to make sure that no fake components is to buy from authorized suppliers.
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Patk0317
8/18/2011 2:19 PM EDT
Gray market parts are more common during a downturn when companies who bought parts above board are forced to get rid of excess inventory that the supplier refuses to take back. The parts are probably perfectly good, but the manufacturer won't support them if they can show that those date codes were sold to company A and some other company is coming to them for tech support. Counterfeit parts are always an issue but again, date codes may prove they are counterfeit.
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Mike.Dillon
8/19/2011 4:18 PM EDT
The issue facing the DOD (and others) is that there is no traceable supply chain for parts that have been out of production for years.
The gray market is the only game, you hope there is unused inventory sitting on the shelf somewhere, but since all that was written off and surplussed (to get it off the books) a long time ago from the traditional supply chain, hard to tell what you get, testing does not help, since you don't have any idea of the production process, how do you do a statistical analysis ?
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TFCSD
8/25/2011 10:11 PM EDT
Back in the old days, older electronics disposal was so dispersed that reclaiming useable amounts of items to turn into counterfeits was unprofitable. Now everybody in a "green" effort are shipping everything to a few concentrated recyclers and vola! We have counterfeits galore.
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Netteligent
9/12/2011 4:25 PM EDT
Apple selling its well known apps, musics, videos for less than $5 or much less. The more populars, it costs much less.
You can rent or stream high quality videos from Hulu, Wal-Mart, Amazon, NetFlix for less than $15/mo with little annoying advertisements.
Industries listening to lawyers and spending billion of dollars on Digital Right Managements and fighting with copyrights.
Cutting down all the unnecessary "middlemen" and pass on saving to customers directly. Only values added providers will survive and grow.
Suddenly, all the "counterfeits" and "copyrights" in Entertainment Industry disappears.
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thiagorulez
5/13/2013 12:56 PM EDT
Most of these fakes are poorly refurbished products pulled from places like electronics disposal in Chicago, or wherever, and spotting them is really not that hard. As suggested, don't be cheap. If you must have the tech, pay for it.
http://www.acmeelectronicsrecycling.com/services/electronics-recycling
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