A counterfeit semiconductor is a “ticking time bomb”

One of the bright spots in recent export activity has been the surge in demand for U.S.-manufactured microchips. But there's a sinister threat lurking in the supply chain to disrupt this trend.

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One of the bright spots in recent export activity has been the surge in demand for U.S.-manufactured microchips. But there’s a sinister threat lurking in the supply chain to disrupt this trend.

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing and design, today announced that SIA President, Brian Toohey testified on behalf of the industry before the Senate Armed Services Committee to aide in their investigation into counterfeit electronic parts in the Department of Defense (DOD) supply chain.

Counterfeit electronics, and the semiconductors they are built on, are a growing threat to the health and safety of military and civilians alike.  This is especially true as microelectronics are found in an increasing number of mission-critical applications such as lifesaving medical devices, automotive safety systems, airplanes and the tools, systems, and communications equipment that the United States military relies on today.

“The catastrophic failure risk inherently found in counterfeit semiconductors places our citizens and military personnel in unreasonable peril. A counterfeit semiconductor is a ticking time bomb,” said Brian Toohey, president, Semiconductor Industry Association. “What is more, counterfeiters violate American companies’ intellectual property rights and cost American’s jobs. We estimate that counterfeiting costs U.S.-based semiconductor companies more than $7.5 billion each year.”

The presence of counterfeit electronics in the DOD supply chain is a multi-faceted problem which requires a multi-pronged approach with a coordinated effort from both industry and government. There are five actions that the SIA has recommended to the Committee to effectively stem the tide of counterfeit electronics:

*Support and continue partnerships between industry and the DOD and Department of Justice (DOJ) to develop a more robust and effective authentication system;

*Strengthen procurement procedures at DOD for mission-critical components, including purchasing exclusively from authorized distributors;

*Ensure industry’s ability to fully partner with Customs and Border Patrol Officials to stop suspected counterfeits at the border by ending CBP’s redaction policy;

*Aggressively prosecute counterfeit traffickers; and finally,

*Stronger enforcement of intellectual property rights internationally.

Air cargo shippers must surely agree with the final statement made by Toohey:

“Our industry takes this threat very seriously and we are committed to doing everything within our power to work with the DOD and other government agencies to stop counterfeits from entering the U.S. and our military and civilian supply chains.”


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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