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Crusade against counterfeit chips

Posted: 16 Jan 2007 ?? ?Print Version ?Bookmark and Share

Keywords:fighting counterfeit chips? beware of counterfeit chips? counterfeit semi? John O'Boyle? QP Semiconductor?

Counterfeiting is a big problem. The latest information on counterfeit ICs points to a trend of more counterfeits sold on the broker market. While the worldwide broker chain provides a valuable service, some unscrupulous brokers will do anything to "fill an order," then disappear and appear only to return under another business name.

The problem is difficult to quantify because many companies whose parts are counterfeited are reluctant to publicly disclose the details. In the mid-1990s, Intel microprocessors were being counterfeited. Non-working parts were sold as valid MPUs, and slower parts were re-labeled to higher speed grades. So Intel took an aggressive stance against the counterfeiters. They initiated a program to place a silicon ID on each Pentium and provided software for the customer to verify device legitimacy. The counterfeit microprocessor problem evaporated.

What has caused this "happy" situation? The military/aerospace community is largely to blame. The buying process is measured mainly on lower costs and faster delivery. As a result, the safeguards and procedures put in place to protect product integrity via traceability and Certificates of Compliance (C of C) are ignored.

The typical buyer is under pressure to locate and procure components at the lowest cost, because both internal management and the ultimate customer demand the lowest price. The broker market is happy to respond with low prices.

The pricing situation is really artificial. There is a fair price for the goods. Apparently, this is higher than what the OEM wants to pay. So the unscrupulous seller steps in and satisfies the demand.

So, again, who has caused the situation? We have. We've created it by demanding a less than fair price (or impossibly short delivery time) without following procedures.

Of course, the higher-priced components have also created the price umbrella under which the counterfeiters operate. The prices reflect the military/aerospace requirements for traceability and performance assurance. What can we do? Several things come to mind:

  1. Follow the procedures for product assurance and traceability (C of Cs).

  2. Understand that the price umbrella created by high-value parts encourages unscrupulous vendors to sell imitation parts. If it sounds too good to be true, it probably is.

  3. Recognize that the military/aerospace community is just a fraction of the world's total IC consumption and is of little interest to the IDM. So we'll need to enforce our own "best practices" and require buyers to follow them.

  4. Don't play into the unscrupulous vendors' hands by ordering parts from them and then not reporting the fraud. Get some dialogue going. There are government agencies eager to locate, arrest, prosecute and shut down these vendors.

  5. Investigate security markings. There are firms that provide such services. We need to be able to trace the materials back to the original manufacturer via trusted paths.

The problem is growing because we are encouraging the wrong behavior. We reward the procurement folks for saving money. In reality, the reward should be for procuring the quality devices required by the specs. It's back to the quality disciplines that have rewarded businesses for years, setting the right metrics, not just the easily measured ones.

- John O'Boyle
New Business Development Director
QP Semiconductor Inc.

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