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Counterfeit Electronic PartsMitigating the ThreatAAQG Registrar Management CommitteeSAE AS9100 Auditor WorkshopJuly 22/23, 2010Brian Hughitt, NASA HeadquartersOffice of Safety and Mission Assurance1

PRESENTATION TITLEwww.nasa.gov

What are Counterfeit Parts?Electronics Manufacturing Industry Substitutes or unauthorized copiesA part in which the materials used or its performance has changed without noticeA substandard component misrepresented by the supplierElectronics Distributor Industry Items that are produced or distributed in violation of intellectual property rights,copyrights, or trademark lawsItems that are deliberately altered in such a way as to misrepresent the actualquality of the item with intent to defraud or deceive the purchaser.– Any information omitted or means taken to mislead the purchaser to believethat such items are authentic or lawfulUS Department of Energy / SAE AS5553 A copy or substitute without legal right or authority to do so, or onewhose material, performance, or characteristics are knowinglymisrepresentedEIA/G-12 Committee 3An item whose identity or pedigree has been deliberately altered ormisrepresented by its supplier

Counterfeit Electronic Parts– Parts re-topped &/or remarkedto disguise parts differing fromthose offered by the originalpart manufacturer– Defective parts scrapped bythe original part manufacture– Previously used partssalvaged from scrappedassemblies– Devices which have beenrefurbished, but representedas new product.Re-toppingDevice leadcondition showsparts were usedMarking indicates anOp Amp from ADI but containsdie for a VoltageReference fromPMIPart number indicates aCLCC package, but thispackage is a CDP Evidence of priormarking for a part withinferior performance Remarking accompanied bybogus test report4

Counterfeit Part ExamplesNew versusRefurbished leadsBlacktop peeling away.Sand marks evidentDual MarkingsAcetone SwipeNational Semiconductordoes not use“ : ” in part numbersMissing Serial Number

Counterfeit Part ExamplesPackage MarkingIs PhillipsDie MarkingIs Intel

Counterfeit Part ExamplesX-Ray showing die patternof known good partX-Ray showing die patternof counterfeit

Which Device is Counterfeit?CounterfeitKnown Good Part

Innovative / Hi-Tech Re-MarkingExemplar TopSurfaceSuspect TopSurfacePure Acetone / 7 Day SoakSoak- No AffectNew Blacktop Material Can Only BeRemoved With an XX-acto Knife

Bogus Test Reports25 companies, 19% of thoseemploying testing contractors,had problems with U.S.-basedfirms concerning faulty orforged testing.– The parts were cleared by thetesting house, but were laterfound to be counterfeit by thecustomer.“This is an area thatdeserves further analysis.”10U.S. Department of Commerce

11Counterfeiting TrendGIDEP

Counterfeiting Trend and MagnitudeTotal Counterfeit Incidents:10,0009,3568,6009,000U.S. Customs Notifications8,1398,0007,000YearNumber 03,8683,0002,0001,00002005200620072008 (est.)U.S. Department of Commerce

Semiconductor Manufacturer SurveyIn June 2006, the Semiconductor Industry Association (SIA) established theAnti-Counterfeiting Task Force (ACTF) consisting of semiconductormanufacturing company members involved in the investigation ofcounterfeiting and coordination with law enforcement.Semiconductor Manufacturer disclosures – Company A: Over 100 part numbers have been counterfeited in last 3 years.– Company B: 19 cases reported involving 97,000 units.– Company C: Since June 2006, there have been 4 seizures of counterfeits of ourproducts by U.S. Customs; units seized ranged from 6000 to 60,000.– Company D: “We estimate that 2-3 percent of purchases of our brand arecounterfeit”– Company E: A broker website indicated 40,000 or our devices available, but ourcompany had only made less than 200 units of that device with the specifieddate code. If all 40K were available it would result in a 34 million loss.13

ependenBrokertDutshoistri zribedutorDisstri ocenaslSOecCurMi ncieovsernmentsAIndSources of Counterfeiting40%30%30%20%20%10%7%6%6%6%5%3%3%U.S. Department of Commerce2%1%0%0%0%0%0%

Sources of Counterfeiting“Most broker organizations are very small and do nothave established quality control procedures in place. Wehave more than 10,000 brokers in our database. Ofthose only 200 have more than 10 employees andquality control procedures for their staff. That leaves us9,800 to fall victim to. Many brokers are working out oftheir home. All someone needs is a phone, fax and email address and they are in business.”American Electronic Resource, Inc.15

Sources of CounterfeitingBogusQualificationsMultipleAlias’s

17Sources of Counterfeiting

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http://www.businessweek.com/magazine/content/08 41/b4103034193886.htm?chan top news top news index - temp top l reports/20100302ceo guide to counterfeit tech.htm

Product ImpactGIDEP Counterfeit Case SummariesEE-A-06-01Test failures at a defense contractor were found to be microcircuits containing many different chipsEE-A-06-03Supplier of military hardware found suspect counterfeit microcircuits having dual part number markingsEE-A-06-04Microcircuits that failed product testing were found to have chips from another sourceM9-A-07-01During manufacturing of a military product, suspect counterfeit transistors were functional failures6E-P-07-01Memory device supplier confirmed parts marked with their name did not contain their chipsUY7-P-07-01Microcircuits, that failed electrical testing, were found to contain chips from another manufacturerNB4-P-07-01Suspect counterfeit microcircuits, from an unauthorized distributor, found during testing at an aerospace supplierJ5-A-07-01Independent distributor supplied suspect counterfeit parts (not available from original supplier) to defense plantJ5-A-07-02Microcircuits, supplied by an independent distributor, were suspect counterfeit (device markings not authentic)A2W-A-07-01Suspect counterfeit transistors failed electrical tests; found to have many different chipsJ5-A-07-06Programmable logic devices found to be suspect counterfeit (lot code was after manufacturer discontinued parts)J5-A-07-09Microcircuits found to be suspect counterfeit as the lot date code was after the manufacturer stopped productionUE-A-07-01Suspect counterfeit microcircuits failed electrical tests; contained chips from another manufacturerAAN-U-08-052 A government entity reported counterfeit circuit breakers in nuclear power plantsCE9-P-08-02Military parts manufacturer reported U. S. authorities have recently intercepted many counterfeit parts shipmentsUL-P-08-01Distributor unable to provide test reports on suspect counterfeit microcircuits that failed during factory testingD4-A-09-01Military hardware manufacturer found suspect counterfeit programmable devices showed part remarking

How Companies Are UncoveringCounterfeits1261Returned as Defective1116Discovered Defective Parts/Poor Performance929835776693604Markings, Appearance, Condition of PartsNotification by OCMTestingCustomer Suspected Part Was CounterfeitNotification by US Customs341Self-Initiated Investigations180Notification by OEMReturned as Wrong MerchandiseAbsence of Original DocumentationReturned as Excess InventoryNotification by GIDEPNotification by DLANotification by Other US Government AgenciesNotification by Non-US Government AgencyOther5015866332Unauthorized Overrun by Contract Manufacturers0200400600U.S. Department of Commerce800100012001400

Product ImpactWhat “failed parts” mean to NASASchedule slippageCost IncreaseReduced performancePoor reliabilityProduct failure Personnel Safety Mission SuccessDecline in mission readiness22

ResourcesWork Groups/Committees/Associations US Chamber of Commerce Coalition Against Counterfeiting and Piracy (CACP)Semiconductor Industry Association (SIA) Anticounterfeiting Task Force (ACTF)SAE G-19 Counterfeit Electronic Parts Technical CommitteeCenter for Advanced Lifecycle Engineering (CALCE)Surface Mount Technology Association (SMTA)TechAmerica G-12 Counterfeit Task GroupAerospace Industries Association (AIA) Counterfeit Parts Integrated Process TeamInternational Microelectronics and Packaging Society (IMAPS)Components Technology Institute (CTI)NASA Quality Leadership Forum (QLF)Independent Distributors of Electronics Association (IDEA)ERAISEMIDoD Trusted Defense Systems WorkshopDoD Trusted Foundry ProgramDefense Logistics Agency (DLA) Counterfeit Parts Integrated Process Team (IPT)

Training (cont)

Resources

Resources (cont)

Resources (cont)

Resources (cont)

Semiconductor Industry Association (SIA)Anticounterfeiting Task Force (ACTF) Goal is to stop counterfeit IC’s from entering theglobal marketplace through education, awarenessand enforcement Aligns with the China RECS program Aligns with the China QBPC Partnered with and trained US Customs indetection of counterfeit IC’s Partnered with DoD, NASA, NCIS, FBI criminalinvestigators Actively Seeking cooperative efforts with UnitedStates, China and European Union officials. Partnered with the DOJ/DHS National IPRCoordinating Center to investigate and prosecuteimporters of counterfeit semiconductors Working with outside counsel to gather andcollate industry data for case development andpresentation to law enforcement and IPR Ctr

Customs and Border Protection

SAE G-19 CommitteeRepresentation from NASA, Aerospace Industry, Military, & CommercialUS Government Members DSCC GIDEP MDA NASA US AF / NRO (Aerospace Corp.) US Army - AMRDEC US Navy - NAVAIR US Navy - NSWC US Navy - NCIS US Customs and Border ProtectionIndustry Members Arrow Zeus Electronics BAE Systems Boeing General Dynamics Jabil Circuits Lockheed Martin Maxim Integrated Products Northrop Grumman Orbital Sciences QP Semiconductor RaytheonIndustry Associations Aerospace Industries Association (AIA) Best Manufacturing Practices Center of Excellence (BMPCOE) ERAI, Inc. Government Electronics & Information Technology Association (GEIA) Independent Distributors of Electronics Association (IDEA)

Government & Industry Working esManufacturers32

The Way Forward

SAE AS5553 RequirementsCounterfeitParts ControlPlanPartsAvailabilityIn ProcessInvestigationPurchasingVerificationof rialControlAppendixesfor Guidance

Organizations Adopting SAE AS5553 NASA Policy Directive Missile Defense AgencyPolicy Memorandum DOD adopts SAE AS5553August 2009 Private Industry Organizationswith counterfeit avoidance plans: BAE SystemsOrbital Sciences Corp.LockheedL3 Communications

SAE G-19 Technical Standards3. TestLaboratories2. DistributorsSAE AS60811. BuyersSAE AS555337SAE ASxxxx

Accreditation/Certification3. TestLaboratories2. Distributors1. Buyers38

SAE G-19 Test & InspectionMatrix SubcommitteeStandardize Test & Inspection Requirements Across IndustryType ofPartTest Matrix – testing performed by certifiedtest laboratories k Based RecommendationsApplicationPartSupplierSystem intended to create standardized testing methodology throughout industry

Inspection & Test MatrixExternalVisualTechnique Category Technique - examyes Authenticity validation100%yes Quality conformance/validationsampleReliability assuranceComponent TypeResistors - fixed valueResistors network - arrayVariable resistorsHeating element/Resistance wireThernistorsVeristorCapacitor - fixed capacitanceCapacitor network - arrayVariable capacitorVaricap diodeInductor, coil, chokeVariable inductor/Saturable InductorPhysical Real-timeXRFMarkdimensions X-rayAnalysisPermyes yes yes sample100%sampleyes yes yes yes samplesample samplesampleResistanceto Solvents(forInternalevidence of Visualre-marking) Examyes yes - sample sampleDPAMin FuncTest 25Cyes - 100% yes - 100%yes yes samplesamplenonoBasic DCTestyes sampleyes - 100% yes - 100%

Help from Above

FAR Case 2008-019