Components | February 15, 2012
Reports of counterfeit parts quadruple since 2009
Reports of counterfeit parts have soared dramatically in the last two years, according to information and analysis provider IHS.
The rise in counterfeits presents huge challenges for electronics manufacturing and especially the military and aerospace industry at a time when the U.S. government is tightening regulations covering fake components, according to information and analysis provider IHS. From original equipment manufacturers (OEMs) to contract manufacturers and from component suppliers to component buyers, supply chain participants in 2011 reported 1,363 separate verified counterfeit-part incidents worldwide, a fourfold increase from 324 in 2009, according to IHS. This marked the first time the reported number of incidents in a single year exceeded 1,000, a total that could encompass millions of purchased parts. This was according to IHS data, which includes information from the industry’s two recognized reporting entities—ERAI Inc., a privately held global information services organization and exclusive partner to IHS; and the Government-Industry Data Exchange Program (GIDEP). The surge over the past two years is the latest development in a rapidly escalating global supply chain trend toward increased counterfeiting and piracy of global products, with counterfeit part reports having risen by nearly a factor of 700 over the last decade. The figure attached presents total counterfeit-part reports compiled by IHS showing suspect counterfeit or high-risk electronics for the period of 2001 to 2011. The bulk of these incidents were reported by U.S.-based military and aerospace electronics firms. However, the parts themselves may impact any worldwide company using the same electronics within their products. With each report possibly encompassing thousands of parts and millions of dollars in revenue, the use of potential counterfeits represents a major liability with grave financial downside for these companies. Even more ominously, this phenomenon could pose a serious threat to human life or national security. “The counterfeit issue is serious, it’s growing and it’s a major problem for electronics makers—especially military and aerospace companies,” said Rory King, director, supply chain product marketing at IHS. “The problem has grown increasingly hard to ignore, as reports of counterfeits have risen exponentially and most companies lack the awareness and capability to effectively detect and mitigate the growing problem. The reporting done by the industry can help other organizations pinpoint risky parts or suppliers. And now that United States legislation will hold defense suppliers accountable for counterfeit issues, access to these incident data becomes a critical decision-support capability for business systems.” The counterfeit challenge Counterfeit parts are often cheap substitutes or salvaged waste components that fail to meet strict military and aerospace specifications, leading to potential failures. Even more concerning, these failures put lives at stake. Furthermore, there are fears that some counterfeit devices like integrated circuits have the potential to act as malicious Trojan horses that could be disabled remotely, compromising defense capability at critical times. The expense to resolve a single counterfeit incident can be massive. For example, the government reported how the U.S. Missile Defense Agency learned that mission computers for Terminal High Altitude Area Defense (THAAD) missiles contained suspect counterfeit devices that could have led to an entire system failure. The cost of that fix was nearly $2.7 million. Government action To help combat the problem, President Obama on December 31, 2011, signed the fiscal year 2012 U.S. National Defense Authorization Act (NDAA), which adds regulations for counterfeit part detection and avoidance. Members at all tiers of the defense supply chain must put counterfeit risk mitigation procedures in place and certain steps must be completed within 270 days of the president’s signature. New defense regulations include: · Contractors are now responsible for detecting and avoiding the use or inclusion of counterfeit electronic parts or suspect counterfeit parts · Contractors are also responsible for any rework or corrective action that may be required to remedy the use or inclusion of such parts · Defense contracts will no longer allow the cost of counterfeit electronic parts and suspect counterfeit electronic parts or the cost associated with rework or corrective action to resolve the use or inclusion of such parts · Qualification procedures and processes must be established to use trusted suppliers and procure electronics from authorized suppliers All electronics makers at risk The counterfeit problems are more widespread than a single incident report might suggest. According to IHS, a typical bill of materials (BOM) or parts list for a military/defense program can have anywhere from a few hundred to over tens of thousands of purchased parts, of which between 0.5 to 5 percent typically match incidents of counterfeit parts reported to ERAI. The same is true for medical equipment—products known for sharing high-reliability electronics needs with the military. When just one counterfeit poses major risk, the fact that a typical company has hundreds or thousands of matches to known problematic parts in circulation should be a major cause for concern. Combating the counterfeits To achieve compliance with the new NDAA requirements and avoid the significant cost they may now incur for counterfeit incidents, companies in the military/aerospace electronics industry must obtain systems and data to analyze, assess, and act on counterfeit and suspect counterfeit electronic parts. They also need to know qualified and authorized government suppliers in order to use trusted suppliers and avoid those that are risky. With thousands of parts and suppliers scattered across programs and throughout the supply chain, this will not be easy. By making use of available tools and ongoing reports for counterfeit, substandard and high-risk parts, electronics makers can cut costs, avoid risk, and expedite NDAA compliance.
Cree, STMicroelectronics fortify SiC agreement Cree Inc. and STMicroelectronics have expanded their existing multi-year, long-term silicon carbide wafer supply agreement to more than USD 500 million.
LPKF expands in Garbsen, Germany The laser specialist has started the construction of a new clean room factory for the production of glass microstructure components at its headquarters in Garbsen, Germany.
Cree, ABB form partnership for SiC technology Silicon carbide technology specialist Cree and ABB’s Power Grids business have announced a partnership to jointly expand the rollout of silicon carbide for semiconductors.
Soitec & Applied Materials to develop next-gen SiC substrates Designer and manufacturer of semiconductor materials, Soitec, is entering a joint development program with Applied Materials on next-generation silicon carbide substrates.
Sponsored content by EsemdaContract manufacturer Esemda opens new facility in Vilnius and expands EMS The new facility has been built with reserved space for future expansions. As Esemda constantly grows, it is of great importance to be able to rapidly increase production capacity in large volumes.
Swissbit to stay on top of demand with new Berlin fab Back in late July of 2018, Swissbit AG, broke ground on its new R&D and manufacturing facility in Berlin with the aim of tripling the production capacity of location. Now its already up and running.
Nuvia closes series A, eyes data center servers Santa Clara semiconductor design startup Nuvia Inc., formed earlier this year by three former top Apple Inc. design executives, has closed its series A round with USD 53 million secured.
Ingun's going global; expands in Latin America and Eastern Europe Benjamin Sontag (INGUN Prüfmittel GmbH) gave a short update on expansion plans in Latin America and Eastern Europe.
Yageo to acquire KEMET in a $1.8 billion deal Yageo Corporation and KEMET Corporation have entered into a definitive agreement under which Yageo will acquire all of the outstanding shares of KEMET’s common stock for USD 27.20 per share in an all-cash transaction valued at USD 1.8 billion.
Sponsored content by SourcengineComponent Aggregators vs E-Commerce Marketplaces What is the difference between electronic component aggregators and a marketplace?
67% of a buyer’s journey is now done digitally. Learn how marketplaces emerged as full-cycle procurement platforms and challenged the traditional component aggregators.
EVG and DELO partner to expand materials and process capabilities Supplier of wafer bonding and lithography equipment for the MEMS and semiconductor industry, EV Group (eVG), is partnering with DELO, a manufacturer of industrial high-tech adhesives, in the area of wafer-level optics.
Osram recommends current takeover offer from ams Osram says it has concluded a business combination with Austrian chipmaker ams and is recommending its shareholders to accept the current takeover offer.
EpiWorld speeds up commercialisation of SiC devices with AIXTRON AIXTRON SE has provided an AIX G5 WW C system to EpiWorld International Co., Ltd for the further development of next generation silicon carbide (SiC) epitaxial wafers mainly used for the manufacturing of power devices for automotive applications.
FlexEnable makes acquisition for flex displays FlexEnable, developer of flexible organic electronics, has purchased Merck's portfolio of high-performance organic thin-film transistor (OTFT) materials.
Sponsored content by Z ElektronikaZ Elektronika opens new factory in Pécs To keep up with rapid growth of the company, on the 13th September Z Elektronika celebrated the grand opening of its new electronic design and manufacturing facility close to the highway in Pécs, Hungary, which adds new features and production site to its nearby location.
Samsung’s CPU project ends, layoffs in CA and TX Samsung has confirmed in a letter to the Texas Workforce Commission that layoffs as a result of the closure of the CPU project at the Samsung R&D Center (SARC) in Austin, Texas and the San Jose Advanced Computing Lab (ACL) in San Jose, California, will begin December 31.
Marvell completes acquisition of Avera Semi Marvell has completed its acquisition of Avera Semiconductor, the Application Specific Integrated Circuit (ASIC) business of GlobalFoundries.
IAR Systems opens office in Taiwan Swedish IAR Systems, a supplier of software tools and services for embedded development, says the company is expanding in Asia with the opening of an office in Taipei, Taiwan.
ZF and Cree partners up to advance the electric drive ZF Friedrichshafen is teaming up with silicon carbide semiconductor specialist Cree, to create industry-leading, highly efficient electric drivelines.
Broadcom completes acquisition of Symantec Enterprise Security business Semiconductor company Broadcom, says that the company has completed its acquisition of the Enterprise Security business of Symantec Corporation
AVX acquires Chengdu OK New Energy AVX Corporation says it has completed the purchase of Chengdu OK New Energy, Ltd. (COKNE).
Vesper names new SVP of worldwide sales & business development MEMS sensor company Vesper, announces that Lorenzo Ponzanelli has joined the company as senior vice president of worldwide sales and business development, overseeing sales strategy and execution to drive global growth.
Gigaphoton establishes new company in China Gigaphoton, a manufacturer of light sources used in semiconductor lithography, says it has established and started running the business of a new company – Gigaphoton China Inc. in China.
Prepare, adapt & overcome - how ‘to Brexit’ The looming, but yet unknown, effects of Brexit have forced companies to prepare for whatever may come. But how does one really prepare for unknown consequences?
Acal BFi signs pan-European agreement with Champs Technologies Acal BFi says it has added Champs Technologies to its magnetics portfolio. Acal BFi is a Europe-wide specialist technology supplier and design partner with a specialist portfolio of magnetic cores and inductive components products and services.Load more news