Components | May 21, 2012
Pitfalls of counterfeit-part epidemic
Companies attempting to manage the growing challenge of counterfeit electronic components face a range of government- and industry-related pitfalls that make it virtually impossible to eliminate all risk associated with the plague of fake parts, according to experts speaking at the 2012 ERAI Executive Conference.
Speaking to a sold-out crowd of more than 300 industry participants, presenters from information providers, standards organizations, defense contractors and distributors detailed the challenges associated with the rising tide of counterfeit and fraudulent devices. While much of the discussion focused on the impact of fake parts on the military/aerospace sector amid new defense department regulations, the presentations also examined the effect of counterfeits on the broader commercial electronic markets. Garbage out, counterfeits in The scale of the counterfeit problem has growth dramatically in recent years, with reports of counterfeit parts quadrupling from 2009 to 2011. Supply chain participants in 2011 reported 1,363 separate verified counterfeit-part incidents worldwide, a fourfold increase from 324 in 2009. Much of the counterfeit-parts problem can be traced back to the enormous amount of electronic waste (e-waste) generated each year, according to Bob Braasch, senior director, supply chain, for IHS. “People don’t hold onto their old electronic devices,” Braasch told the event attendees. “A three-year-old cellphone is ancient, so people are constantly upgrading to the latest device. As the world economy improves and as technology continues to develop, people increasingly will be looking for the latest technology. All of this electronics consumerism translates into e-waste.” Braasch noted that 58 percent of e-waste generated by the United States is shipped to developing countries. All too often, electronic components such as semiconductors are culled from this waste and then returned to the U.S. and other developed countries in the form of counterfeit parts. As the number of counterfeit parts has grown, government regulations covering fake parts have grown more stringent. The U.S. National Defense Authorization Act (NDAA), which was signed into law on Dec. 31, imposes strict regulations and severe criminal penalties on counterfeits supplied for government military and aerospace programs. While this phenomenon is impacting all electronics market, including consumer, communications and computing devices, much of the attention has been focused on defense, due to the NDAA. The devil’s in the details One major problem companies face when attempting to comply with the new regulations is the vague language and difficult-to-comply-with requirements contained in the NDAA, noted Kirsten M. Koepsel, director of legal affairs and tax at the Aerospace Industries Association (AIA). For example, section 818 of the NDAA calls for the Department of Defense (DoD) to “establish a process for analyzing, assessing, and acting on reports of counterfeit electronic parts and suspect counterfeit electronic parts…” The NDAA also mandates that DoD contractors and subcontractors must obtain parts “from the original manufacturers of the parts or their authorized dealers, or from trusted suppliers who obtain such parts exclusively from the original manufacturers of the parts or their authorized dealers.” However, the definitions of “suspect counterfeit part” and “trusted supplier” are unclear, Koepsel noted. Despite such ambiguities, the burden appears to fall on DoD contractors and subcontractors to report any cases of suspect counterfeit parts to the Government Industry Data Exchange Program (GIDEP). The NDAA also places the onus for detecting counterfeit parts upon importers of devices, calling upon them to arrange for examination and release of the goods. Nevertheless, it can be very difficult to detect imported counterfeits. Koepsel highlighted a recent case where criminals in New Jersey conspired to conceal the import of counterfeit goods, using various means including generic outer lids on boxes and generic labels on products to hide the counterfeit brand-name labels beneath. The criminals also falsified paperwork and used fraudulent personal identification documents, such as Social Security cards, to carry out the scheme. “All someone needs to do is make the boxes of counterfeit parts look like there are shoes inside—and you will never know that fake parts are coming in,” Koepsel said. Counterfeiters get smart Companies that purchase electronic components also face a threat from increasingly sophisticated counterfeiters working to overcome even the most diligent methods to test for fake parts. “Counterfeiters are escalating—they know what we are looking for and move on to the next step,” said Tom Sharpe, vice president at SMT Corp., an independent distributor of electronic components to the defense and aerospace industry. Always a risk This issue underscores a more fundamental problem: regardless of what steps companies take, the danger of counterfeit parts will continue. “No matter how much testing there is, there will never be zero risk,” said Mark Northrup, vice president at contract manufacturer IEC Electronics Corp. “Even the most accurate testing measures can only give a range—and not a single result.”
Sonos buys French voice tech company Snips Santa Barbara-based Sonos Inc. has acquired Snips SAS, a French company specializing in AI voice platforms for connected devices that provides private-by-design voice technology.
Mouser opens local customer service center in the Philippines Distributor Mouser Electronics is continuing its expansion of its ts customer service in Asia with the addition of a Customer Service Center in the Philippines.
Perceptron, Coherix cement partnership for bead inspection Michigan industrial metrology developer Perceptron Inc. has announced a commercial partnership with fellow Great Lakes State company Coherix Inc.
Dr. Arne Schneider takes over as CEO of Elmos in 2021 The Supervisory Board of Elmos Semiconductor has decided to extend the appointment of CEO Dr. Anton Mindl until the end of 2020. After this he will have had 15 successful years as CEO and will remain closely associated with the company as consultant.
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.
Magna expands lighting capabilities by acquiring Wipac Czech Magna has agreed to acquire Wipac Czech s.r.o., a automotive lighting engineering firm located in Ostrava, Czech Republic.
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.
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.
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.
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.
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.
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 CorporationLoad more news