John O’Boyle, Senior Business Manager for the Military/Aerospace Group at Maxim Integrated Products explores the underworld of counterfeit ICs and how the problem is being tackled with a serious line of defence
At least once a week a request or inquiry is received by Maxim from its customers’ QA engineers concerning the pedigree of a part that they suddenly find is not working properly. In almost every case it turns out that the troublesome device is not a genuine part. Most of the time, the part is a remarked device with the same package that the company uses. Every once in a while the part is a die from the company, but a lower grade remarked to a higher grade. In short, the problematic device is a counterfeit.
Counterfeiting as an international industry covers virtually everything made or manufactured. In 2006 the total dollar revenue of counterfeiters was estimated to be in the $700 billion range and growing rapidly. Conservative estimates place the annual growth at 10 percent, even through the recession as people sought lower prices for goods; projecting that growth forward from 2006, the 2011 revenue number is somewhere close to $1125 billion.
At this level if one were to rank the counterfeit industry in terms of GDP, this ‘Counterfeit Nation’ would rank number 15 in the world’s economy and just above South Korea’s 2011 GDP estimate of $1116 billion.
Counterfeit electronics are a big industry, but clearly a small part of the overall total. Nonetheless, the ramifications of a counterfeit IC device failure in an electronic system are more than inconvenience or minor loss of money.
The counterfeiters are getting better and more skilled. They have improved machines for demarking and remarking which are so good that the altered top marking looks genuine. They can now micromachine the laser mark off a package and then remark with their own laser the part number, the logo, and the date code as they desire. Figure 1 shows a real Maxim part on the left with grade ‘B’ and the counterfeit part on the right changed to grade ‘A’.
Counterfeiters can even make packing slips, address labels, and Certificates of Conformance look authentic, Figure 2 is an image of what, at first glance, appears to be a proper Maxim shipping label. It is not.
There is something even more frightening with this situation: many low-grade legitimate parts are being remarked to a higher grade and getting into critical electronic systems. When this happens, the counterfeit inferior parts will work suitably for a short while, but only for a while. They are stressed from the outset and it is highly likely that they will fail
An IC failure due to a counterfeit part is very serious. When the counterfeit IC fails, it can inflict serious injury, or at a minimum interrupt or delay a mission.
Counter the Counterfeiter
How do these counterfeits even get into the system? The counterfeiters’ motive is obvious: remark a part as a higher performance part and charge more for it. But, in fact, counterfeiters flourish because of IC production timetables and unplanned customer demand in our own industry. The counterfeiter leverages two typical customer desires:
1• We need it and now
2 • We want it at the lowest price
Typically in the electronics industry special, higher grade parts have long lead times. Customer procurement must plan far enough ahead to get these parts before they are actually needed for production. When lead times and customer timetables collide, the procurement department looks for an alternate source and all too often this is the so-called grey market. Additionally, when the procurement agent looks for the best deal he, or she, often ends up in the cross hairs of the counterfeiter.
The counterfeiting problem resides, and flourishes, in this industry-so does the solution. IC suppliers and IC purchasers, need to change several behaviours. Firstly, many IC purchasers need to improve procurement planning. Look as far ahead as possible to procure long-lead-time parts. Given adequate advance notice on product demand, the IC industry could accommodate the occasional sudden demand.
IC manufacturers often have a few parts remaining after a production run and these could be available for true customer emergencies. But that ideal demand-and-ship process would only work if everyone plans for the long-term and it becomes the norm, not the exception.
Obsolete parts can and do pose a problem. Yes, but with adequate, advance planning alternate devices can be identified or new designs with new parts can be developed. Meanwhile, these grey-market counterfeiters will continue to come up with parts long out of production and sometimes even relabelled with new date codes!
Secondly, customers should be cautioned against shopping only for the best deal, as that strategy can lead you right into the grasp of a counterfeiter. Instead product authenticity, with all the guarantees that implies, should be the objective. Thirdly and finally, the industry mantra should be to buy only from approved sources. If approved sources do not have a device, this dramatically lowers the probability of locating the genuine part in the grey market. In fact the probability is close to zero.
Where do we go from here?
So in summary, customers must know the authorised sources for an IC and use only them. IC purchasers need to plan further ahead. IC manufactures and sales staff must inform and motivate procurement teams to buy only authentic parts. Together, an IC customer and IC supplier should not let the best delivery/price drive all business deals. It requires a fundamental change in the way we all conduct business, and that is not so easy to do… unless we plan ahead and also buy from authorised sources.
Maxim Integrated Products
