Report reveals fake chips in U.S. military hardware

5/31/2012 10:19 AM EDT

The most obvious but expensive solution is to require all components to be manufactured here in the USA and procured through a secure chain. Perhaps the cost for doing this would be very high, but considering the possible costs for failure of the systems these components are composed of, it may be very justified!

5/24/2012 9:29 AM EDT

Normally if supply and management personel do the right thing this counterfeit issue may not happen. A lot of time I found that someone did not place a last time buy (LTB)order until the LTB date expired and he/she has to scramble and buy parts from the grey market. Another case would be someone forgot to place order for a long lead time part, and had to source part from a grey market to meet their manufacturing delivery date. So, some one has to be blamed for suplly and management's scew up - that would be the counterfeiter.

Wil

5/23/2012 6:11 PM EDT

What sort of different management practices would those be? Most defense contractors lack the capability or knowledge to re-test an IC against all of the manufacturer's data sheet parameters to determine whether the IC is what its markings say it is.

Certain practices could be implemented, like establishing and auditing certain trusted distributors, and procurement rules (and penalties) that address the issue of "known instances of the use of suspected counterfeit components were not reported promptly to the DoD by contractors."

But your proposed solution focuses on just one link in the supply chain -- the defense contractor -- and ignores the real problem, which is that "defense contractors are frequently unaware of the ultimate source of parts used in defense systems." Without auditable chain of custody for all parts used in their systems, a defense contractor can't know with certainty if a part is counterfeit -- he can only suspect that one might be.

In some ways the problem with counterfeit ICs is not so different from the problem of expertly counterfeited currency. If a cashier unknowingly passes an excellent counterfeit $20 bill to you, without using sophisticated methods of detection, you assume it's genuine and you spend it. Eventually, after changing hands several times, the counterfeit is detected. Who is responsible? The last person who handled it? Everyone before him who handled it and didn't know?

5/23/2012 6:06 PM EDT

BTW this is sarcasm for all you management types.

5/24/2012 6:29 PM EDT

Part of the problem is that the Aerospace/Military industry is working with products that were designed many years ago. These companies can no longer get some of the components from their vendors because they are now obsolete. They are forced to go to the "gray market" for them. But there are some simple tests that can be used to screen out the counterfeits.

5/29/2012 3:44 PM EDT

I love this question because it touches on two important things: the inescapability of oddly named Asian manufactures and a lack of appreciation for the complexity of the military supply chain. First item - at this point I've mostly gotten over the silly names because Asia's where the action is. Admit it: these days if you got a call from Happy-Lucky-Sparkly-Super-Golden Electronics you’d have to take them seriously, after an initial chuckle of course. But even I'll admit that “Hong Dark” should send up a red-flag.
So who would buy from them? Companies on what I call the "Third Tier" of the military industrial complex - those who actually manufacture the piece-parts that make up the sub-system components that go into the "platforms" that the big system integrators like Lockheed Martin, Boeing or Northrop Grumman sell to the military. Anyone stuffing a VME board would be another way to put it. They might be forced to work with a Dark Hong, or Shiny Happy Sparkly Golden Inc. because of the of obsolescence, or timeline, or BOM cost reduction, or a myriad other reasons that keep us engineers busy. Or in the case of Western friendly countries there is this thing called a "Set-Asside" where a certain portion of the contract is "Set-Asside" for the country in question. For example Taiwan is one of those countries and they do a lot of manufacturing in China.

5/29/2012 1:40 PM EDT

Glenn, I agree that COTS has to go but for a different reason: COTS is a misnomer. I spent 10 years selling electronics before coming home to the bench. Many of my customers were military. Some were direct - research bases and such, and some were indirect - contractors big and small. We sold "COTS" equipment and what a joke that term has become. How many products from the shelves of Best Buy do you know that would survive 15G impact, work under 6 feet of water or at 105C? Those are the kinds of operational requirements put on a "COTS" box these days. The more appropriate term is MOTS - Military Of The Shelf.

5/29/2012 4:10 PM EDT

Those layers of suppliers are inevitable. A prime contractor buys a subsystem from a subcontractor. That sub buys various electronic assemblies from his subs, and so on. Down at the lower levels you eventually get to the companies that actually buy ICs, transistors, resistors, capacitors and inductors from distributors.

A key element of any solution is auditable chain of custody, so that every component can be traced back to its point of manufacture. Of course, that will also add a lot of cost that must ultimately be absorbed by the contracting agency.

5/30/2012 6:01 PM EDT

The simplest definition might be "an electronic component that is not what it's markings claim it is."

For military systems, I suspect that a large portion of the counterfeits are simply commercial-grade ICs that are re-marked as military-grade, but are otherwise the same part. Commercial-grade parts may fail certain parameter tests at extreme temperatures, where the genuine military-grade parts would pass.

A more extreme example would be if the silicon die inside the package is not even the correct die for that part number, or not even made by the manufacturer whose logo has been marked on the package. One example might be substituting a cheap op amp die for an expensive high-performance one. The package bears the logo and part number of a name-brand manufacturer, but what's inside is not that part number or not even something that company manufactured.

5/31/2012 12:12 AM EDT

Maybe it is odd in US, but counterfeit is very common in Asia, especially in China. We usually see just a bare plastic after opening up the "chip" and there is indeed on silicon content! In China, the supply chain is even more complex. Bribery is the main reason why people won't buy from proper and authorized channel! Will the US Government be really so clean? I really doubt it!

6/7/2012 10:51 AM EDT

It's not bribery. Your buyer is only finding the part stored in a warehouse in China where it's cheap to store parts. If the part was stored in the US it would be taxed as inventory.