There's a classic Pogo cartoon in which the main character concludes, "We have met the enemy and he is us." This pretty much sums up the industry efforts to battle the influx of counterfeit components into the electronics supply chain.
"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," IHS iSuppli said in a press release on the ERAI Executive Conference.
Anti-counterfeiting measures were one of the topics covered at last week's conference, which IHS co-hosted.
The very people that regulations are designed to protect -- consumers -- are unwittingly a large part of the problem, Bob Braasch, senior director of supply chain for IHS, said at the conference.
“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 fake parts have proliferated, governments have tried to stem the tide by developing more stringent regulations. One of them is the National Defense Authorization Act (NDAA), which was signed into law on Dec. 31. The law is meant to protect the defense industry from fake electronic goods. However, the language of the law apparently makes it difficult to comply with its requirements.
Among other things, the NDAA mandates that DoD contractors and subcontractors 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, Kirsten M. Koepsel, director of legal affairs and tax at the Aerospace Industries Association (AIA), said at the conference that the definition of “trusted supplier” is unclear. The same goes for “suspect counterfeit part.” However, according to the IHS release:
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.
The experts concluded that, regardless of what steps companies take, it is virtually impossible to eliminate risk.
The industry cannot afford to do nothing. Too many electronics parts go into mission-critical applications such as defense and aerospace equipment. But I'm not sure that regulating the purchasing of parts is the correct approach. Once devices are in the supply chain, they are difficult to track and detect. A better step would be to regulate the collection and disposal of substandard components (from factories) and electronics equipment (from consumers). This would cut off a major source for counterfeiters. It's a lot easier to avoid counterfeits if they don't exist in the first place.