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Counterfeiting as an Art Form

Today, I was thinking about what is behind the relentless surge in counterfeiting beyond the obvious motivation of greed.

I couldn't help but think about the intellectual drive and challenge that made hacking, which was initially an insider sport, evolve into the very real and present threat of cyberterrorism. I doubt if the first hackers even considered that they were developing the foundational skillsets for undermining national security.

The spirit behind the hacking community was more intellectual “one-upmanship” than to do any real harm. How many computers could be attacked with a signature virus was a game of numbers that drew admiration from fellow hackers using cryptic monikers.

Many of the hackers knew each other only by their “cybersleuth” names. Hacking was more of a scientific art form than a malicious undertaking. Even though harm was done and criminal activity eventually profited from this art form, the original hackers became famous within their own circles and because of their advanced skills with computers, eventually became employees of companies trying to protect themselves against hackers trying to penetrate firewalls. Consider the same genesis as a possibility behind counterfeiting.

Pride of authorship?
Imagine the initial counterfeiter's pride as he has managed to reverse engineer and duplicate an Intel processor requiring millions of transistors with multilayer interconnects. The first working wafer out of the illicit foundry operation must been a source of great pride and a cause for jubilant celebration.

The skill set for such a cloning process must have been extensive with several dozen engineers and scientists involved. Now, Pandora's Box was opened and the core capabilities used to clone something as complex as a microprocessor could be used across a wide variety of semiconductor components. Dopant implant equipment, epitaxial deposition gear, diffusion ovens and chambers, lithographic photography, X-ray, masks making equipment, and numerous other types of specialized wafer production and slicing mechanisms would leave a pretty big footprint that could be followed from initial procurement to final placement.

In other words, one way to track the counterfeiters is to follow the production equipment from purchase to destination. But, I hear you say, because that supply chain is muddled by second- and third-generation purchasing sequences involving used equipment, the original or used equipment cannot be tracked beyond the original purchaser. So here is a suggestion how we might better hit the counterfeiters where it hurts.

Suggestion: Have legitimate foundries identify and register their  fabrication equipment serial numbers in a universal database using RFID technology.

Suggestion: Have legitimate foundries identify and register their
fabrication equipment serial numbers in a universal database using RFID technology.

Modest proposal
Have all legitimate foundries identify and register their fabrication equipment serial numbers in a universal database. The serial numbers are embedded into RFID modules that are both encrypted and protected by self-destruct and alert mechanisms if tampered with.

At the time of wafer fabrication, the equipment used for fab also signs itself onto an electronic traveler as the wafers go through the various stages of processing. With the final RFID write operation being assigned at final test and packaging. The traveler is then assigned a lot number cross reference whereby every wafer and every die can be traced back to the equipment that was part of the process of manufacture.

I readily admit this is a gross oversimplification of a solution, but my contention is that if we want to get to the source of the counterfeiting problem, we have to be able to determine if the foundry was legitimate or not. If all foundries signed into the national database and kept their equipment status current, then with a simple RFID cross check against process/equipment travelers, it would be possible to quickly identify bogus chips.

Start with the seeds
As to the “art” of counterfeiting, I don't think these artists will be putting down their brushes anytime soon. But, if you consider that one way we can help combat the influx of conflict minerals is by identifying and certifying smelters around the world, why can't we do the same with semiconductor production equipment?

If we add GPS tracking for major pieces of equipment, we could track the movement and final destination of used equipment. Now logistics management takes over to identify and qualify or disqualify the new foundry. RFID info is updated or removed and the supply chain is just that much more secure.

As I said, it may be a gross oversimplification and I will accept all criticism for this suggestion, but if you want to get at the root of the counterfeiting problem, then you have to start at the seed level. Without the seed, no root can come into being. In like fashion, without the equipment, no wafers can grow.

What do you think?

17 comments on “Counterfeiting as an Art Form

  1. ddeisz
    February 28, 2013

    Douglas,

    I think there are less complex ways to hit counterfeiters in the pocket book. In analyzing ERAI counterfeit data for 2012, it's pretty obvious which semiconductor OCM's are being counterfeited more than others. It's also pretty obvious that e-waste is still the biggest source of those components. Stopping e-waste should be priority #1 in this “hitting them in the pocket book” strategy. Priority #2 needs to have semiconductor OCM's actually caring about whether thwarting counterfeit matters to them. Frankly, some don't care because it's not obvious there is much revenue loss being had or much revenue gain to be had. The #1 counterfeited OCM in the world according to 2012 ERAI data is Xilinx. Their long-term product strategies, EOL strategies, and success have landed them this #1 status. 

    Imagine a strategy embraced by the semiconductor OCM's where products designed into  or specifically designed for long-term systems (for which they typically enjoy higher margins) have a long-term strategy that goes beyond “buy enough at LTB or you are screwed”. Currently, there is no such strategy at most OCM's. There is creative financiing with strings attached at LTB. There is talk of “10 year availability”. When pressed for details, these are not really strategies. These are mostly tactics used to gain higher margin adjacent business in the long-term markets to what is really a commercial short-life product strategy.

    Some OCM's are going to stand up and do something about counterfeit, regardless of the revenue because it's just the right thing to do. Some will do nothing because they don't see a revenue return on the activity and view the activity as diversionary to their mostly-commerical short-life product cycle plans.

    Dan Deisz

    Rochester Electronics

  2. FreeBird
    February 28, 2013

    I think Douglas' idea works well up to the point of the device exiting the factory. If scrap products aren't destroyed as intended, then scrap can presumably show up as coming from a legitimate foundry, be still be a substandard item. That said, more ideas have to thrown at the problem from all sides.

    I think the manufacturing industry can take a page from the book of companies that now admit to being hacked. One of the reasons counterfeiters are still in business is because companies that have bought counterfeits never fess up. I agree with Douglas, though: any solution will have to address the cradle-to-gave process that makes up component manufacturing.

  3. dalexander
    February 28, 2013

    @Freebird…Good point on scrap reuse. I don't know how we would ever resolve that issue as there are so many hands involved in the illicit, under the radar scrap recycle business. My idea is like an over-the-horizon proposal because it would be a major shift in manufacturing while so many other major shifts are already only partially implemented and rather half baked and not very enthusiastically supported. I read the NYT about companies that have been hacked coming forward. http://www.nytimes.com/2013/02/21/technology/hacking-victims-edge-into-light.html?emc=eta1&_r=0

    GIDEP exist for industry to come forward and register that they have been victims of counterfeiting, but it serves the military and aerospace sector and not so much commercial. You have to prove Military of Aerosapce supply house status before you can sign up for GIDEP services.

  4. Dorothea Blouin
    February 28, 2013

    Re-packaging a discarded integrated circuit and labeling it with a tony brand name and fake specs after subjecting it to heat beyond spec to get it off the board, and then arranging for it to be assembled into an otherwise new piece of equipment is the same as polishing up a discarded carborator, putting on the wrong specs and arranging for it to be assembled into a car.  It doesn't take Art. Plus, the resulting piece of “new”equipment, isn't.

    In addition, the extraction practices are highly polluting and hazardous.  This is one reason that E-Waste regulations are proliferating around the world (EU, China, India, and Korea – possibly others), and there are attempts worldwide to stop claudestine e-waste exports.    

    Often, e-waste handlers and recyclers must be certified or otherwise be approved tp collect e-waste under these regulations.  Standards and good practices should be part of the certification – including, in addition to proper general waste and recycling processes, destruction of storage devices and circuit boards (including the ICs on them).

  5. ddeisz
    February 28, 2013

    Actually, GIDEP doesn't support Aerospace unless it happens to be for the US/Canadian military. It's purely a US/Canada military tool. It is extremely audience-limited. While mandated to use for DoD in the US when reporting counterfeit, the data isn't there for all to see when government agencies (DLA) enter their data unless they make it visible. Currently, GIDEP is of minimal use for generating real actionable change wrt counterfeit.

  6. dalexander
    February 28, 2013

    @ddeisz, I have a close friend who was a GIDEP Coordinator for his aerospace company in Colorado. I will have to ask him if the company also supported the military.  In general, if a company supplies goods to the US Government, they can become a member of GIDEP. For instance, Agilent Technologies, maker of test equipement for Commercial is a member. In like fashion, Advanced Circuits, where I bought my last few runs of Printed Circuit Cards is also a member. I think it is more accurate to say that GIDEP membership is not restricted to military but to government suppliers in general. So, companies that you would not normally think of as a military supplier, may indeed be shipping products to the various governement agencies that qualify them to become members in GIDEP. Allied Electronics, a huge commercial distributor and AVX, the passives company also are members of GIDEP. Here is what is stated on their home page:

    Participation Guidelines

    Any organization that meets one of the following criteria may become a GIDEP member:

    • U.S. or Canadian industrial organization who supplies items or services (directly or indirectly) to the U.S. Government or to the Canadian Department of Defence
    • U.S. or Canadian government department, agency, or activity
    • Licensed U.S. Public Utilities Company
  7. SunitaT
    March 1, 2013

    If we add GPS tracking for major pieces of equipment, we could track the movement and final destination of used equipment.

    @Douglas, thanks for the post. Adding GPS tracking device to the equipments is a very good idea and might help us curb the counterfeiting to some extent. But do you think its possible to add GPS devices to the tiny equipments ? And what about the cost, I am sure adding GPS will escalate the cost of those equpments.

  8. dalexander
    March 1, 2013

    @tiriapur, you know I am just thinking creatively and trying to various methods for fighting counterfeiters. If the GPS tech cost more than the device it is on, I don't think it is worth it. But, at some break point it might be advisable to track equipment with GPS. The more I read and write about counterfeiting warfare, I become more convinced that the final solution will be a combination of tech methods and devices. RFID with GPS, or DNA with with RFID, or Rules Based RFID with QR or Barcodes. The ultimate solution will be a function of authentication and monitoring from OEM to Final End User. By this I mean unique identifiers tied to manufacturing date and serial number or lot numbers with time-based tracking and station marking such that a reverse audit trace is 100% available. I know where the part was at 12:02 PM, Thursday, the 23rd of March, and I knew where it was at 12:03 PM, Thursday, the 23rd of March. In brief, I have eyes on capability 24/7. There are TREK devices at the part, package, carton, pallet, and container level now that monitor location, time, temperature, open-closed, angle, and humidity. I would like to think that someday, as soon as you are notified of a shipment, the package number is forwarded to your real time tracking computer and you can watch it move along a predefined course so you know where it is at all times. The military does this for carrier truck freight hauling weapons or dangerous materials over land. They can see when a truck stops and if the cargo doors are opened. Maybe someday distributors will have a service like this that kicks in on every shipment, tied to a customer's real time, dedicated logistics monitoring system display. Dream big because little dreams don't own the future.

  9. SunitaT
    March 1, 2013

    If the GPS tech cost more than the device it is on, I don't think it is worth it. But, at some break point it might be advisable to track equipment with GPS.

    @Douglas, I agree with you. Eventually we have to use GPS to track the equipments but big question is who will bear this extra cost ? Do you think it would be fair if the companies pass on this extra cost the end customer ?

  10. ddeisz
    March 1, 2013

    Sorry Douglas, I should have been more clear. While many are able to sign up and have signed up to use GIDEP, only those that have to actually use it. The DATA is of less use because the tool itself is not as good as others (ERAI's for example) from a useability perspective. When you look at who is entering counterfeit data, it's only those oranizations who have to…..and they are doing it reluctantly.

  11. dalexander
    March 1, 2013

    @ddeisz, you are right about that. I think there is a big issue with companies being reluctant to report instances of counterfeiting because it makes them look vulnerable as to their internal supply chain management's effectiveness. That in turn makes the GIDEP system not as effective as it was designed to be.

  12. William K.
    March 1, 2013

    Just like a lot of other crimes, most counterfeiting is done by criminals and lawbreakers. So no amount of regulation of those folks who choosw to abey the laws will affect those who choose to violate the laws. That fact is ignored by a whole lot of people wanting to create utopia by force. It is a perenial heresy that has been around for hundreds of years, although it has had digfferent names in that time.

    As for motivation, and why do they produce counterfeit parts? Possibly those who produce correctly functioning copies may actually wish to compete by stealing a design and selling the copie. BUT my thought is that the primary motive is greed, without any thought about the damage that they are doing. Just plain old selfish greed, without anynhigher motivation or any redeeming virtues of any kind. And I am sure that there are a few producing and selling the fake parts who delight in the damage they are doing to our country and the balance of the free world. The fact is that freedom as we know it here does have a few enemies, including some who despise freedom all in itself, apart from what it has given us here. So I certainly don't see any form of noble thought in the heads of any of the counterfeiters.

  13. dalexander
    March 2, 2013

    @William K. , There is nothing noble whatsoever about counterfeiters. In fact, I think the term ” ignoble” fits perfectly. I agree no amount of legislation will slow them down. Greed is at the heart because every knock-off sold is lost opportunity for the legitimate goods supplier. What would you suggest would be the minimum prison term for a counterfeiter?

  14. William K.
    March 2, 2013

    I am not certain that jail time is the best thing to do to counterfeiters, although it should remain an option. Possibly some sort of probation along with the liability of having to pay for the damage done. Of course, the probation would be for life, or at least until they were no longer able to counterfeit. 

  15. owen
    March 4, 2013

    Douglas,

    This may seem a bit harsh in a “civilized country”, but when it come to counterfeit money and drugs Bangladesh isn't alone…” Bangladesh Bank Currency Management department officials said the law proposed the 'death penalty' for confiscation of 10,000 or more than 10,000 fake notes or relevant paper of the same amount, ink and other accessories… Officials hope the law will be passed in the next parliament session.” (Death Penalty News – 1/7/13)

    http://deathpenaltynews.blogspot.com/2013/01/death-penalty-for-counterfeiting.html 

    That would put a dent in the problem, what do you think…

  16. dalexander
    March 4, 2013

    @owen, I think the best punishment is the one that fits the crime. Sort of like Eye for an Eye, but not so brutal. I think a counterfeiter should be sentenced to hard labor, where the labor produces a useful commodity. The counterfeiter would not be paid anything for the labor, but would receive maybe two meals a day. The amount of labor and the consequent term of the sentence we be a function of 4 times the value of the assessed damages for the counterfeiting operation. So, if there were 100,000 dollars of counterfeit goods, the counterfeiter would have to work off 400,000 dollars worth of labor at some minimum wage equivalent. If it took him a life time of indentured labor, then so be it. He just got himself a life sentence. If a death resulted from the counterfeiting, then he should be brought before a jury and tried for murder. After all, he did take away a life and so he should be tried accordingly. If it is a business organization with hundreds of employees, then the officers and principal actors should be tried and sentenced accordingly. I think the hard labor for two meals a day, may be a bigger deterrent that death because the motivation for counterfeiting is greed. Make them work 4 times as hard, losing their freedom, with no gain, and that goes against their natural grain so radically, that they will never want to find themselves so I un-gainfully employed ever again. Two offenses of the same nature, automatically earns a life term of indentured labor.

  17. owen
    March 4, 2013

    @Douglas, I could live with that.

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