Xilinx/Flextronics Suit Shines Light on the Gray Market

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Hailey Lynne McKeefry
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Re: Grey market
Hailey Lynne McKeefry   2/19/2014 11:07:32 PM
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@Owen, very interesting quote... and article. Thanks for the lik.

Eldredge
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Re: Grey market
Eldredge   2/19/2014 8:58:47 PM
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The national interest in achieving greater supply chain and cyber security is so compelling that, in the author's estimation, the federal government will act irrespective of industry's doubts.


I think that statement pretty well sums up the realisitc situation. There is too much at stake for the federal government to stay at arms length, no matter how much it distains adding more regulations. :)

 

owen
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Re: Grey market
owen   2/18/2014 8:16:47 AM
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@Halley, Given the course of these comments I thought you may be interested in an article by Robert Metzger just published by Bloomberg/BNA.

Mr. Metzger is recognized as among the nation's leading experts in emerging issues related to supply chain risk management and avoidance of counterfeit electronic parts. He is Vice-Chair of the Supply Chain Subcommittee of TechAmerica.

"Some in industry object to greater government intercession in supply chain and cyber risk management, citing an absence of standards and concerns about industrial base impact and adverse effects upon traditional notions of ''open competition.'' Even though many such concerns have merit, industry should focus its attention on preparation for new rules and regulations, rather than objection and resistance. The national interest in achieving greater supply chain and cyber security is so compelling that, in the author's estimation, the federal government will act irrespective of industry's doubts. The pace of implementation of supply chain and cyber actions is likely to accelerate and the breadth of such actions likely will encompass most or all federal procurement functions. Companies that ignore or resist these trends do so at their business peril."

http://www.rjo.com/PDF/FCR_04182014_RSM.pdf

owen
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Re: Grey market
owen   2/15/2014 3:37:40 PM
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@Halley, you might find a discussion with an Applied DNA Science rep worthy as well. By the way, they do offer plasma/laser deposition/etching. It's mostly for use by larger OCMs, but if it fits the flow it's available.  

Here's another link, it's a bit dated (April 2013) but you may find it interesting. Prepared by APDN and made available by DLA:

http://www.landandmaritime.dla.mil/downloads/psmc/Apr13/DNAMarking.pdf

 

Hailey Lynne McKeefry
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Re: Grey market
Hailey Lynne McKeefry   2/15/2014 1:12:37 PM
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@ddeiz,My understanding is that the DLA made efforts to get input from the industry with little response--which isn't suprising since there's a lot going on and people are incredibly busy. In terms of alternatives, SignaKey has a system that uses laser etching (I'd be interested to know what you think of that system as well). The concerns i've heard on that front is that the laser will cut deep enough to damage the die. I did talk with Richard McDermott the CEO at SignaKey and he told me that thier measurements are very precise and based on the various designs of the chips.

Hailey Lynne McKeefry
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Re: Grey market
Hailey Lynne McKeefry   2/15/2014 1:12:20 PM
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@ddeiz, thanks for your answer... I agree that there are a lot of stumbling blocks to this technology adoption. It has been slower than probably the DLA would like. According to the DLA, as of December 31, 2013, there were more than 500,000 DNA marked parts in circulation but that's a very small percentage of all parts. And at the end of the year 27 companies had signed with Applied DNA to use the DNA marking technology. 15 of those were distributors. There's a long way to go--i know Applied DNA is targetting a variety of markets and one of the benefits of the technology is that it can be used across a wide variety of products. For the military folks, we are buying all sorts of stuff, i'm sure that's a positive.

 

 

ddeisz
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Production Synthesizer
Re: Grey market
ddeisz   2/13/2014 10:06:09 AM
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Hailey,

The acceptance by the semiconductor OCM's is virtually non-existant for DNA marking. The mandated technology is ink-based when the industry is primarily laser based. The product validation is not currently done in the field and certainly wasn't when the mandate occured. The end-markets for the vast majority of revenue for the semiconductor industry do not have nearly the counterfeit issues that long-life system houses have. The financial incentive on commercial semiconductor product volumes is simply not there for DNA tagging and won't be there in long-term system markets. Remember, DLA is less than $20M/year of FSC 5962 product purchases. For perspective, $20M/year is a failed SINGLE product or going EOL for most semiconductor companies.

When you couple these reasons with the fact that DLA does not purchase product through Authorized Sources as a priority when product is available (never has even though the NDAA says you should), there is really no reason it will be accepted by a vast majority of the semiconductor market OCM's. They aren't buying from our Authorized Sources as a priority. Their trusted sources are mostly Independents while their FSC 5962 product purchases are more than 65% active product and could be bought through Authorized Sources....and were prior to the mandate.

DLA mandated their solution with none of their suppliers involved without addressing their purchasing practices to favor Authorized First when available. They took the "we mandate, you must comply" tact of old instead of proposed alternatives by the SIA. The Independent dealers saw a government-funded way to jump into the void and supply product....now supplying 90% of the FSC 5962 transactions by DLA. Good for them, but is that the best we should be doing for the warfighter? 

Hailey Lynne McKeefry
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Re: Gray Area
Hailey Lynne McKeefry   2/12/2014 8:01:49 PM
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@Owen, thanks for the link. I hadn't seen this.

Hailey Lynne McKeefry
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Re: Grey market
Hailey Lynne McKeefry   2/12/2014 7:59:51 PM
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@ddeisz, you said: "DNA tagging does not have promise for the semiconductor industry in general."

Can you say more about why you believe that is true? Is it that there are too many products already in the supply chain that aren't marked? Is it a distrust of the technology? I'd be interested in where you see the flaws.

Hailey Lynne McKeefry
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Re: Gray Area
Hailey Lynne McKeefry   2/12/2014 7:56:49 PM
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@MikeRR, I think you've hit the nail on the head, that relationships are a key piece of the equation.  What, though, should customers be doing at the outset (before those relationships are being built up and maintained) to choose the right partners? Do you have any advice about pitfalls or hallmarks of a good disty partner?

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