Sidebar: How bad is the counterfeiting problem?
In a word, bad. And it’s getting worse.
Counterfeit computer hardware, including chips, was one of the top commodities seized in 2010 by U.S. Immigration and Customs Enforcement. Seizures in the category were up fivefold last year over 2009, ICE reported.
Between 2007 and 2010, ICE collaborated with U.S. Customs and Border Patrol (CBP) on more than 1,300 seizures that collectively involved 5.6 million counterfeit semiconductor devices. The fakes bore the trademarks of 87 Asian, European and North American chip companies. More than 50 seized counterfeit shipments were falsely marked as military- or aerospace-grade devices.
A 2010 U.S. Department of Commerce report on counterfeit electronics in the defense industry corroborated the trend. Based on responses from component manufacturers, the Commerce study reported an increase of more than 150 percent in the number of counterfeit parts showing up in military and government applications between 2005 and 2008.
Counterfeiters range from negligent brokers who don’t test the parts they import to criminals intent on deceiving their customers. As the VisionTech case shows, counterfeiters can make a lot of money by buying cheap fakes and reselling them for 10, 100 or even 1,000 times more than they paid for them.
And the counterfeiters are getting bolder. In June, $852,000 worth of counterfeit SanDisk portable memory chips were discovered and seized by federal agents at the Port of Long Beach/Los Angeles, according to the Los Angeles Times. CBP agents found the chips hidden inside 1,932 karaoke machines shipped from China.
|Source: Testimony of SIA president Brian Toohey before the House Committee on Homeland Security Subcommittee on Oversight, Investigations and Management
For manufacturers, it’s essential to have a formal and rigorous process for inspecting and testing suspect components. The components themselves, shipping documentation and packing labels must be inspected as the boxes come off the receiving dock. Suspicious parts should be tested with X-ray inspection systems and high-powered microscopes. Companies should have the chips decapped either mechanically or chemically to check the die markings if they believe it might be warranted. — Bruce Rayner