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Counterfeit Parts Alarm US Military

Counterfeit electronic parts are on the rise. The US military is particularly alarmed.

The Senate Armed Services Committee met in November to discuss the risk counterfeit parts are posing to the reliability of US military defense systems. After the hearing, Senators Carl Levin and John McCain introduced an amendment to the National Defense Authorization Act to address this problem. The Senate passed it 97-3. It is expected to pass the House as well and become law shortly.

Why all the concern?
Counterfeit electronic parts are invading the US supply chain at an increasing rate. More than 70 percent of the counterfeit parts are coming from China. Ironically, counterfeiters in China are frequently making counterfeit parts from US electronic waste (e-waste) shipped to China. (See: Military Hardware Security Compromised .)

Counterfeiters typically take scrap components (like semiconductors and transistors) and then sand off part numbers and any other identifying marks. Then in a process known as “black topping,” they recoat the parts to hide the sanding marks. Black-topped parts often look brand new.

The US defense industry is particularly vulnerable to counterfeit electronic parts. It typically relies on military and commercial-grade “obsolete parts” to maintain its equipment. That reliance results from the long lifecycles of defense systems. An electronic part may be manufactured for only a couple years, while a defense system can remain in service for over two decades.

Defense contractors are often forced to purchase hard-to-find replacement parts from independent distributors. There is an inherent risk in doing this. While some independent distributors operate legitimately, others may be set up for the sole purpose of selling counterfeit parts. Some defense contractors understand that and take steps to reduce counterfeit risk. They impose strict requirements on their suppliers and test electronic parts not purchased from an original manufacturer or authorized distributor.

The ease of doing business via the Internet adds to the problem. It provides counterfeiters access to the global marketplace. A large number of internet-based distributors specialize in selling counterfeit parts.

How can you avoid counterfeit parts?
Here are several ways to help ensure you are not buying counterfeit parts:

  • Buy only from an original manufacturer or an authorized distributor.
  • Avoid making gray-market purchases.
  • Send your scrap electronic equipment to a high-quality in-country recycler that does not engage in offshore e-waste shipments.
  • Authorized distributors should establish systems to reduce counterfeit risk, adopting and adhering to strict, internationally recognized quality standards, like AS9100, AS9120 or AS6081. (See 10 Tips for Avoiding Counterfeit Components.)

What does the new rule adopted by the US Senate require?
The Levin-McCain amendment targets large US defense contractors. It requires them to establish systems for detecting and avoiding counterfeit parts and authorizes reduced payments to contractors who fail to do so. It also requires contractors to absorb the costs of fixing problems caused by counterfeit parts.

In addition, the amendment requires the Secretary of Homeland Security to conduct enhanced inspections of electronic parts, and the Department of Defense to adopt policies and procedures for detecting/avoiding counterfeit parts and for assessing and acting on reports of counterfeits.

Are you alarmed by the increase in counterfeit parts? Are you taking any actions to avoid counterfeit parts? Let me know.

And test your counterfeit parts knowledge with this quiz.

42 comments on “Counterfeit Parts Alarm US Military

  1. Cryptoman
    December 21, 2011

    This is something new for me. I have never heard of “black-topping” process before. From what I understand, this process puts the old and scrapped parts back into the supply chain and can seriously degrade the reliability of the new systems they are installed in. It does sound like a serious problem for mil-spec products though.

    Surely, there must be certain test strategies that can be used to detect the “aging” in electronic components. There may be reliable metrics that can be used to differentiate between new and old semiconductor electronic parts. Such test strategies may be used to filter the counterfeit parts that are about to creep into the chain. Instead of testing every single part, the lengthy tests could be applied randomly in batches of purchased parts to improve the time efficiency of this testing process.

    The above is just me thinking out loud.

  2. AnalyzeThis
    December 21, 2011

    Thanks Ken, I think you share some good advice… as you mention, this is a bigger problem in the military due to the obscurity of parts and the often high potential for profit involved.

    As you mention, avoiding gray-market purchases and buying only from authorized sources can help you avoid many issues, but in addition to that… just use common sense: if you find a price that seems too good to be true, there's probably a reason for that. Even if the product isn't counterfeit, if the price is unusually low you may be dealing with a used, mislabeled, or flawed part of some kind.

    You can never truly completely eliminate the risk of acquiring counterfeits, but if you are smart and don't take silly chances, you can at least reduce your chances greatly.

  3. Barbara Jorgensen
    December 21, 2011

    @cryptoman: Ken could probably go into greater detail, but there are ways of testing components. In fact, most companies that buy and sell excess inventory in the open market do test components before sale. I think they use a combination of x-ray and visual inspection. But counterfeiting techniques continue to get better, so it is a constant struggle to stay current.

  4. semipoint
    December 21, 2011

    Just wondering if you read the article you reference written by your colleague Dawn Gluskin? If you had, I'm surprised that you would blatantly disregard ALL independents and tell readers to Buy ONLY from authorized distributors or original manufacturers. There are many Independent Distributors in the electronic component industry that have exceptional counterfeit avoidance protection processes in place. In your last bullet point of tips on how to avoid counterfeit, you made a recommendation to Authorized Distributors that they should establish systems to reduce counterfeit risk, adopting and adhering to strict, internationally recognized quality standards, like AS9100, AS9120 or AS6081. Why wouldn't you make this same recommendation to Independents as well?  

  5. stochastic excursion
    December 21, 2011

    I'm also surprised that counterfeit parts are an issue for the military.  Mil-spec components have stringent quality requirements that mean incoming parts go through burn-in, visuals and parametric testing on a statistical acceptance basis.  If parts dressed up to look “like new” are getting through to major assemblies, someone must be cutting corners somewhere.

  6. TTT
    December 21, 2011

    I agree that this is a problem but when I worked for farnell the company did not have any procedures for management of counterfiet  parts, nor did they have any intention of going for AS certification in the UK. There is a saying in the UK about the kettle calling the pot, it may be the case here.

  7. Anand
    December 22, 2011

    More than 70 percent of the counterfeit parts are coming from China.

    China is major supplied of counterfeit of electronic goods.  China is not only supplying counterfiet hardward but also software with “malware” which can be used for spying. Since China is major economic competitor to USA, US should stop importing chinese goods especially military parts.

  8. Anand
    December 22, 2011

    Even if the product isn't counterfeit, if the price is unusually low you may be dealing with a used, mislabeled, or flawed part of some kind.

    @DennisQ, unfortumately we can't use this logic. What if counterfeit parts are sold at higer price than geniune parts ? Will you buy that because price is higher ? So its better to make the deal based on the authenticiy of the seller rather than the price aspect.

  9. FLYINGSCOT
    December 22, 2011

    It is very difficult to spot some counterfeit devices.  I believe the best way forward is for the military to agree an excryption standard that cannot be broken and only use suppliers who place this special key in their devices.

  10. AnalyzeThis
    December 22, 2011

    @anandvy, that really wasn't what I was saying… I was just saying that if the price is too good to be true, there's probably something wrong. And to just use common sense.

    In one of the published instances of the military being fooled by bogus parts, a big part of the reason they purchased from that supplier to begin with is because they offered a far more competitive price.

    You are correct in saying that this doesn't automatically mean that counterfeit parts are always sold at a significantly cheaper rate than authentic parts, however, it is far less likely this would be the case because if genuine parts are available from an established supplier for less than the cost of a counterfeit, there would be little reason to purchase a more expensive part from a riskier source.

    The main reason people look for alternative/gray market sources for parts are to get them at a cheaper price. Which I do not believe to be wise.

  11. prabhakar_deosthali
    December 22, 2011

    To avoid counterfeit parts being made from the scrap sent from US, why can't that scrap be crushed to debris? ( like the sensitive paper is shredded before being put into dustbin). Why leave a chance to those counterfeiters who pick old parts from the scrap and black top them to look new?.

    Just eliminate the source of counterfeiting if it happens to orginate in US scrapyards

  12. Barbara Jorgensen
    December 22, 2011

    @prabhakar: believe it or not, some of the stuff destined for scrapyards gets “lost”. I hear that is fairly common. Chip makers subcontract the disposal and don't always check to make sure th job is done.

  13. Redding McLemore
    December 22, 2011

    Adherence to the standards mentioned is a good start, but to be clear, AS6081 is not yet released and is intendend for independent not authorized distributors.  There are many new technologies being employed now to detect counterfeit activity and others which make it considerably harder (think of the US mint's efforts to embed anti counterfeiting technology into our currency).  However, this safety will come at a price of both money and time, the latter of which is in short supply when the grey market is employed. 

    I agree with the comment that ewaste must be destroyed.  One might imagine how a legitimate secondary market could exist whereby parts are marketed as used or refurbished.  Unfortunatley, this has not taken shape, either because it is an untenable business proposition in practice or because there is just so much more money to be made passing them off as new.  Not to be too philisophical, but perhaps we should not be surprosed to see these come from communist culture whereby the only people who could make money in the past were black marketers, but today are out in the open.

    For our military, it is a case for continuied sustaining engineering to enable the replacement of obsolete technologies where possible.

  14. TTT
    December 22, 2011

    one way to ensure that the components are genuine is to ensure that the distributors are serious about quality my experience is that badges and certification are just a necessary evil to make money, the point is that most distributors are only interested in selling stuff rather than quality

  15. kmanchen
    December 22, 2011

    I am really pleased with the interest shown in this topic! Sorry I have not replied previously but I had a login problem that is now resolved.

    Let me say that finding cheap, easy to find “obsolete parts” from an unfamiliar internet seller should make you cautious.

    As to the question about detecting counterfeit parts the answer is yes there are effective detection methods.

    Visual inspections of incoming parts can detect poor quality counterfeit parts. X-ray inspections can detect anomalies and contamination, material evaluations can detect material defects, and die marking inspections can detect defects. The problem is the cost of inspections (beyond visual inspections of incoming parts) can be significant versus the cost of the parts. Being prudent in who you buy from and asking your supplier(s) to explain the measures they take to detect and ensure against counterfeit parts is critical.

  16. kmanchen
    December 22, 2011


    “Just eliminate the source of counterfeiting if it happens to orginate in US scrapyards”

    Prior blogs have discussed the e-waste problem and the need for a uniform federal e-waste law. We currently have 25 US states with e-waste laws. Each slightly different. Until we have a comprehensive federal law the problem will continue.
    My company is a distributor and we had a supplier visit to audit how we handled our excess inventory. They went with us to visit our e-waste handler. They even asked for certificates of destruction tp ensure their scrap product did not wind up offshore and in illegal counterfeit products. 

  17. TTT
    December 23, 2011

    One of the notable experts on this subject is a guy from BAE they have identifed fake parts from reputable distributors, a CEO of one distributor is on the board of BAE yet in the UK arm of the same distributor there are no methods implemented to avoid counterfiet parts. Pysician heal thyself.

  18. Eldredge
    December 23, 2011

    Is any of the proposed legislation aimed at prohibiting off-shore disposal or recycling of components from defense industry? Seems like that should be mandatory, not voluntary.

  19. dalexander
    December 23, 2011

    This topic has to rise to the top of the “Things to be really, really concerned list”. With all of the environmental legislation and the amount of resources being consumed to create workable screening programs and enforcing methodologies and authorities, how in the world will this not become another “war on drugs” type effort. We will need to appoint a “Chip Czar” with international reach who can storm counterfeit operations and dump over their ink barrels and seize their computers ala Eliott Ness and Prohibition. On a less grandiose suggestion, I recently read that chips can be identified by recording responses of die level trace length to electronic signals. This unique, one-of-a-kind “fingerprint” approach to authenticity is reminiscent of the “CheckSum” for programmable parts. Every OEM produced chip has a checksum associated to the trace length signal response, and so there will have to be “readers” at the distributor level or possibly the factory using the part in an assembly. I think we will see some of this going online as a business. Think of TI with an surprising login that takes you to their database and you key in a code printed on the top of the chip. If that code is in the database, select “Run” and compare the response number printed somewhere on your electronic version of a packing slip for that particular shipment…also on line. These are just concepts for a solution, but someone has to dig in and make something like this happen…or we are all in deep doo doo…..can I say that?

  20. dalexander
    December 23, 2011

    The checksum type authenticator number would be automatically generated by a random number generator tied to the signal-trace response and recorded and generated at the time the OEM is testing the die for yield pass/fail operations.

  21. dalexander
    December 23, 2011

    . Think of TI with an surprising login that takes you to their database and you key in a code printed on the top of the chip. I swear I didn't type “surprising” the word is “issued” . There, that's much better.

  22. TTT
    December 24, 2011

    Perhaps somebody can clear up the confusion in Element 14 ?.

    If the company is selling to the government for military applications do the Newark/Element 14 conditions of sale (below) provide assurance that these components are authorized for sale on military applications ?

     

    THE COMPANY'S PRODUCTS ARE NOT DESIGNED, RECOMMENDED OR AUTHORIZED FOR ANY OF THE FOLLOWING APPLICATIONS: HIGH-RISK APPLICATIONS SUCH AS SAFETY, LIFE SUPPORT, SURGICAL IMPLANT, NUCLEAR, OR AIRCRAFT APPLICATIONS, OR FOR ANY USE OR APPLICATION IN WHICH THE FAILURE OF A SINGLE COMPONENT COULD CAUSE SUBSTANTIAL HARM TO PERSONS OR CATASTROPHIC PROPERTY LOSS; OR FOR ANY MILITARY OR WEAPONRY USE, INCLUDING BUT NOT LIMITED TO CHEMICAL, NUCLEAR, BIOLOGICAL, AIRCRAFT, MISSILE, AND SIMILAR MILITARY APPLICATIONS. UNLESS AN AUTHORIZED OFFICER OF THE MANUFACTURER HAS AUTHORIZED OR APPROVED ANY SUCH USE(S) IN WRITING, OR ALTERNATIVELY HAS PROVIDED CUSTOMER WITH A DOCUMENT SIGNED BY AN AUTHORIZED OFFICER WAIVING CUSTOMER'S RESPONSIBILITY FOR ANY SUCH USE, CUSTOMER ASSUMES ALL RISK AND LIABILITY FOR USE OF COMPANY'S PRODUCTS IN ANY SUCH APPLICATIONS AND AGREES TO DEFEND, INDEMNIFY AND HOLD BOTH THE COMPANY AND THE MANUFACTURER OF THE PRODUCTS HARMLESS AGAINST ALL LOSSES, LIABILITIES, CLAIMS AND DAMAGES THAT MAY BE INCURRED DUE TO USE OF THE COMPANY'S PRODUCTS IN ANY OF THESE PROHIBITED APPLICATIONS.

  23. Houngbo_Hospice
    December 24, 2011

    “Counterfeit electronic parts are invading the US supply chain at an increasing rate.”

    There should be a “failure” in the controlling system at a level. We cannot prevent China from manufactring counterfeit parts, but I think that there should be a way to prevent the companents to enter the US territory. 

  24. Houngbo_Hospice
    December 24, 2011

    “they have identifed fake parts from reputable distributors”

    I would assume that those “reputable distributors” would say they were not aware that the components were fake. I think that this is time that governments think about implementing methods to avoid counterfeit parts. I know it won't be that easy, but it should be doable.

  25. TTT
    December 24, 2011

    Why should the goverment have to legislate on something that is a contractural obligation on the supplier ? Its up to the business concerned to assure the product not for the government to legislate. Problem is that the distributors will not want to do it because it will add costs to the company, all they are really interested in is the bottom line. It will take a huge disaster like the one in fake aircraft fasteners to shake up the industry. In the meantime the distributors will keep making the fat profits on the risk of killing people.

  26. Taimoor Zubar
    December 26, 2011

    I think one important element in dealing with counterfeit products is to have a centralized system whereby every vendor is recorded and rated. Companies should look up for each vendor's rating before they start procuring from them. And once a vendor is found to be selling counterfeit parts, they should be blacklisted so that other organizations are able to avoid purchasing from the vendor.

  27. JADEN
    December 26, 2011

    The proliferation of countefeit parts is increasingly present at every level of the supply chain, and the rise has demostrated weakness in inventory management, procurement procedures, record keeping, reporting practices, inspection and testing protocols, and communication within and across all industry including government organizations.  Little is being done to avoid the infiltration of counterfiet parts into the supply chain.

  28. Anne
    December 26, 2011

    @ JADEN,

    I share the same view with you.  I don't think organizations in the supply chain do communicate with one another, may be they simply assume someone else is checking for counterfeiting.  There is common lack of traceability of parts.  Do the organizations aware of legal requirements and liabilities related to counterfeits?

  29. Eldredge
    December 26, 2011

    Thanks for the review on counterfeit components  – the quiz was a good way to reinforce the important points in the article.

  30. Kunmi
    December 26, 2011

    Counterfeit issue is a major concern and it is societically disturbing. It does not appear that the problem can be eradicated but it can only be reduced.

  31. TTT
    December 27, 2011

    Physician heal thyself

  32. kmanchen
    December 30, 2011

    Thanks for the comment. You are probably right. Supply chain communication is poor so there is a bit of “buyer beware”. It is heightened by the ease of internet selling. A counterfeiter can easily just change his internet name and address. No easy solution for buyers, just be vigilant. 

  33. Brian775137
    January 2, 2012

    @Jaden:

    I want you to know that this problem is rampant in the US miltary also.  Ther have been 3900 parts, recently, which have diagnosed as counterfeit.  These parts have found their way into Army, NAvy and Air Force circuitry.  As a result, a bill has been introduced into the Senate regarding this problem and the need for an adequate resolution to it.  We at Components Engineering are suggesting a solution for this problem to the government and hope to be able to move forward on it shortly.  While this effort will, primarily, be oriented towards the parts used by the US military, there will be a significant “trickle down” into the commercial market as well.  We will be writing typical Specification Control Drawings (SCDs) for the Military, amongst other things,

     

    nd these can be used by those of the commercial marketplace as guidlines for procuring parts.  Keep you eyes on our website for further developments on this topic.

  34. TTT
    January 3, 2012

    According to my understanding some distributors do not even provide warranty in contract that the new parts they sell are suitable for military applications. In my humble opinion this is a more pressing issue than fake components.

  35. Brian775137
    January 3, 2012

    @TTT:

    That's easy to solve – DON'T buy from such a supplier.

  36. Brian775137
    January 3, 2012

    @TTT:

    This illustrates my previous comments that if there are any problms with obtaining parts with all of your requirements, your choice is to NOT purchase from anyone who won't back up what they're selling to you and you should have a Specification Control Drawing (SCD) for any parts for which you might have a problem or special need.  With an SCD, you are able to tell the supplier EXACTLY what you need and want.  If the suppllier sends you parts which do not meet the requirements of yor drawing, you now have recourse and can return the unwanted parts for credit, which you might not be able to do without an SCD.  You must control what you are receiving, and the best way to do this is with an SCDF.

    Look at it from the supplier's point of view – if he's crooked, i.e. he won't back up the parts he ships to you, then you have to refuse to buy from him, and he loses money.  If he's not crooked, then his motivation is to make money by supplying you exactly (per your SCD) what you want and need, thus setting the stage for further business from you and making money for him.  Remember, it's all about money – dont give him any if he won't supply what you want, but you must tell him exactly what it is that you want and need.  Doing this over the phone, just doesn't work – it must be in writing so that there is no misunderstanding.  The SCD is the best way to do this.

    I know that writing an SCD is costly, in terms of time and money, but that's much less money than you'll spend to fix a problem which occurs if you receive the wrong part.  Once again, I can't emphasize too much that it's all about money!

    Regards.

  37. TTT
    January 3, 2012

    I agree, only problem is that the wording of Element 14/Farnell conditions of sale seem to suggest that they don't offer warranty for military sales. As Ken is the blogger perhaps he could clarify on behalf of Element 14 ?

  38. bolaji ojo
    January 3, 2012

    Brian, Counterfeit products have also entered the channel even through companies that provide written warranties for their products. This has occurred via returns and some companies unsuspectingly have passed on such products, legitimizing their presence in the supply chain. Asking for guarantees is important as you noted and it does help greatly but it is not foolproof. The move to stop it must be coordinated.

  39. Brian775137
    January 3, 2012

    Bolaji:

    Would you please send me your email address.  I have a letter I'd like to send to you, which Douglas, Steve Terry and I have put together, on which you might be interested.

  40. Brian775137
    January 3, 2012

    @TTT:

    This gives credence to wanting to use an SCD all the more.  Unless you have complete confidence in all of the parameters of the part you propose to use in some circuitry, then you might as well be whistling in the wind.  You MUST know everything about the parts you'll be using including the knowldege that they are genuine parts with a vendor's guarantee, not only the parameters of the part.

    When you write an SCD, you are telling the vendor EXACTLY what you want, and as part of the SCD (Specification Control Drawing) you might also write another type of SCD (Source Controlled Drawing). I know that this is somewhat confusing, but the acronym SCD really is used for both.  By controlling the source of the parts, you use your knowledge of that part, including who makes it, and who is the reliable company from whom you purchase it.  If that source isn't willing to give a written guarantee that the part is genuine, then you might think of removing their name from your approved parts list.  Remember what I have previously stated, “it's all about money” and you'd be surprised what happens when the possibility of losing a sale occurrs.

    I know that Element14 is a very reliable company and have caused very few problems with the parts which they provide to the community.  All I'm saying, is to be cautious and absolutely sure you're getting the exact part you want.  “Cover your A–“

    Ken:  Please do not take this as a slam – your company's name was the one used by TTT.  I was trying to be generic and I cannot conceive of Newark/element14 not being willing to assure any company that the parts you provide are genuine to be best of you knowledge, and that you'd replace any which were not as advertised.

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