Securing the Supply Chain Against Counterfeiters

Giving the customer the most reliable product is ultimately the only goal for any company. This applies to all industries and segments that need to replace obsolete semiconductors that have reached the end of life from the original component manufacturer (OCM).

Rochester Electronics presented at this month's SMTA anti-counterfeiting conference. One of the more potentially controversial topics covered at that conference was the Defense Logistics Agency (DLA) mandate to mark parts with DNA. Rochester Electronics has no issue with applied DNA or with DNA technology. DNA taggant is an elegant technology that has already found many uses. The issue is the mandate and how or if taggant technology applies to the semiconductor market.

Overlooked in all the hype is the fact that the DLA represents a fraction of what is already a small market. It is relegated to purchasing products through distribution channels; it cannot purchase directly from OCMs, due to the inherent low volume of products needed. This mandate covers the distribution channel. Purely authorized distribution channels like Rochester Electronics already have warehouses of billions of finished goods and wafer/die that have come directly from the OCMs or other authorized distributors. There is no added value to marking what is already known as good.

Also overlooked in all the hype is that the mandate is not forcing DNA marking of parts that are not available through authorized channels. This is how the vast majority of counterfeit products enter the DLA supply chain. In addition, the DLA purchases parts through an online bidding system. As a result, it does not always purchase through authorized solution providers; rather, it purchases from those that respond the fastest, with the appropriate price tag and availability. As an authorized supplier, Rochester views this as an extremely risky gamble. As the need and demand for electronic components dwindles, that methodology may or may not make sense going forward.

Rochester's position on any taggant technology is that it should be applied only to the non-authorized channel if the DLA insists on its existence. This position is reflected in the Semiconductor Industry Association response, as well. Additional OCMs, such as Analog Devices, have also made public statements that mirror the SIA's response. Again, I have nothing against the taggant technology or the DLA. This has to do with the costly implementation of a mandate that is not really necessary when coupled with inventory that has come directly from the authorized source.

Rochester has never experienced counterfeiting, because all its products are 100 percent traceable to the OCM. Rochester never sources product, and it does not mix in received customer returns. This has been the case for the company's 30-plus years in business. What do you think? We welcome the ongoing discussion.