Presented at October 1, 2009 Counterfeit Workshop

1. Counterfeit Avoidance Through Purchasing Processes
Henry Livingston, BAE Systems Electronic Solutions
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2. Agenda
• Observations from counterfeit detection experiences
• Approaches to reduce the potential of acquiring counterfeit electronic
components
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3. Observations from counterfeit detection experiences
Henry Livingston, BAE Systems Electronic Solutions
© 2009 BAE Systems
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4. Introduction
• BAE Systems issued eighteen (18) GIDEP Alerts from
December 2006 to July 2007 reporting suspect counterfeit parts.
• This briefing presents observations from these examples …
• Case summaries and supply chain analysis
• Observations from counterfeit detection efforts
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5. Counterfeit Case Summaries
GIDEP Alert Findings …
J5-A-07-01 Parts marked as Philips QML product with 2003 date code, but contained Intel die manufactured in 1980
J5-A-07-02 Parts marked as Analog Devices QML product, but markings were not consistent with standard Analog Devices
markings for the device and device contained die of a different function
J5-A-07-03 Parts marked as Cypress commercial product, but parts were salvaged from scrapped assemblies
J5-A-07-04 Received parts Jan-06 thru May-06 marked as On Semiconductor commercial product, but On Semiconductor
did not manufacture these parts
J5-A-07-05 & Received parts marked as Seeq commercial product, but parts were salvaged from scrapped assemblies and
J5-A-07-07 remarked to appear as legitimate/unused product
J5-A-07-06 Parts marked as Philips QML product with 9852 date code, but Philips discontinued manufacture 31 December
1997
J5-A-07-08 Parts marked as National QML product, but major discrepancies in marking format and content, including date
code and manufacturing location; Die contained in these parts were not manufactured by National
Semiconductor
J5-A-07-09 2001 date code, but Intersil discontinued this product in 2000; marking missing country of origin; parts had wrong
lead finish
J5-A-07-10 2004 date code, but Linear Tech discontinued this product in 2001
J5-A-07-11A Parts marked as Analog Devices QML product, but incomplete or absent marking; incorrect lead finish vs part
number; reclaimed or refurbished; invalid test report
J5-A-07-12 Part number and date code do not match the lot number identified in Cypress production records
J5-A-07-13 Suspect marking; evidence of remarking; part number and date code do not match Cypress lot number
J5-A-07-14 Parts marked as Analog Devices “883” product, but incomplete or absent marking; incorrect lead finish vs part
number; reclaimed or refurbished; invalid test report; evidence of prior marking
J5-A-07-15 Parts marked as Cypress commercial product; leads have been re-soldered; evidence of a resurfacing on device
package
J5-A-07-16 Parts marked as Xicor/Intersil QML product, but marking is not compliant to Xicor/Intersil brand layout; die not
associated with QML product
J5-A-07-17 discrepancies in device marking, lead finish and lead quality
J5-A-07-18 parts appear to be reclaimed; the surface roughness the devices markings were stripped and remarked.
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6. Supply Chain Analysis
J5-A-07-01 USA1 USA2 China1 China2 ???
J5-A-07-02 USA1 USA2 USA12 China3 ??? All involve Independent Distributors
J5-A-07-03 USA1 USA2 USA13 ???
J5-A-07-04 USA1 USA2 China4 China5 ???
Seventeen (17) unique part types.
Broad variety of device functions.
J5-A-07-05 * USA3 USA6 ???
Same unique part Ten (10) manufacturers represented.
USA7 ???
USA8 ???
type obtained
through several Twenty (20) USA based suppliers
USA9 ???
USA10 ??? suppliers.
One (1) UK based supplier
J5-A-07-07 * USA1 USA2 USA14 USA15 ???
J5-A-07-06 USA1 USA2 China6 China7 ???
Eleven (11) China based suppliers
J5-A-07-08 USA1 USA2 China8 ???
J5-A-07-09 USA1 USA2 China9 ??? Origin unknown for all cases
J5-A-07-10 USA4 China10 ???
J5-A-07-11A ** USA5 USA11 USA16 ???
Similar bogus Eight (8) out of our eighteen (18) cases
J5-A-07-14 ** USA17 USA19 ???
test reports trace back to sources in China…
J5-A-07-12 USA6 ???
… Perhaps more.
J5-A-07-13 USA17 USA18 ???
Parts exchange hands several times
J5-A-07-15 USA1 USA20 ???
before reaching the end user.
J5-A-07-16 USA1 USA2 China11 ???
J5-A-07-17 USA1 USA2 USA5 ??? Full details available to GIDEP Participants.
UK1 ???
Others may apply for membership at the
GIDEP Help Desk (951-898-3207)
J5-A-07-18 USA1 USA2 USA14 ???
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7. Observations from Counterfeit Detection Efforts (summary)
• Industry and Government inspection and test methods are designed to verify the integrity
of authentic parts … not to detect counterfeits
• Visual inspection of marking for correct and accurate content can provide conclusive
evidence of suspect counterfeits
• Production records may not be available for older parts
• Documentation may not be authentic
• Some parts show evidence of multiple exposures to tests
• Many parts show evidence of poor storage and handling conditions or termination
refurbishing or reclamation
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8. Observations from Counterfeit Detection Efforts
• Industry and Government inspection and test methods are designed to
verify the integrity of authentic parts … not to detect counterfeits.
• External visual inspection methods (magnification levels, failure criteria)
may not detect indications of resurfacing and remarking, termination
refurbishing, reclamation.
• Marking permanency test methods may not be aggressive enough to detect
indications of resurfacing and remarking.
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9. Observations from Counterfeit Detection Efforts
• Industry and Government inspection and test methods … (cont.)
• Ensuring representative sampling for physical and materials analysis can be
problematic.
• If part marking has been forged, however, a single lot/date code marked
on counterfeit devices can disguise
• Parts originating from multiple inspection lots
• Parts produced by multiple manufacturers
• Different versions of the same part
• Devices of completely different functions
• Samples sizes must be large enough to account for this potential
• The user must make adjustments to physical and materials analysis
evaluation criteria detect various forms of counterfeiting.
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10. Observations from Counterfeit Detection Efforts
• Industry and Government inspection and test methods … (cont.)
• Electrical testing can help reveal suspect lots, but may not detect counterfeit
parts without a test plan designed specifically for the device type under test.
• DC electrical tests are frequently used as a low cost and fast detection
technique, but will not detect dynamic performance deviations at
temperature extremes.
• While AC electrical and functional tests are most likely to reveal suspect
product, testing of complex devices requires intimate knowledge of the
original manufacturer’s test protocols.
• In addition, electrical testing alone may not detect damage induced by
inadequate handling and storage, termination refurbishing, or
reclamation.
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11. Observations from Counterfeit Detection Efforts
• Marking quality, legibility, conditions vary significantly
• Visual inspection of marking for correct and accurate content can provide
conclusive evidence of suspect counterfeits.
• Observations based exclusively on marking quality, legibility, and
conditions, however, may be misleading.
• Quality in device marking, marking legibility and overall marking conditions
for both authentic and counterfeit product can vary significantly.
• BAE Systems has observed
• “bad looking” authentic parts
• “good looking” counterfeit parts.
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12. Observations from Counterfeit Detection Efforts
• Production records may not be available for older parts
• The older the parts are, the less likely production records exist to aid in
authentication.
• Original component manufacturer data retention practices may limit access
to production records for older parts.
• In a few cases discovered by BAE Systems, the original component
manufacturer no longer had production records to support our investigations
• In these cases, however, BAE Systems found other evidence sufficient
to conclude the parts were suspect counterfeit.
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13. Observations from Counterfeit Detection Efforts
• Documentation may not be authentic
• In one specific case, a test report was provided by the Independent
Distributor as evidence of
• Authentic parts
• Traceability back to the original component manufacturer
• Feedback from the original component manufacturer revealed that this test
report was not valid.
• The manufacturer did not have test data for parts with the same date
code as those sold to BAE Systems.
• BAE Systems, therefore, concluded that the original component
manufacturer did not produce this specific product with this date
code
• The manufacturer does not use the “Military Certification of
Conformance” label and its content on authentic test reports.
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14. Observations from Counterfeit Detection Efforts
• Some parts show evidence of multiple exposures to tests
• BAE Systems discovered a case where additional marking on the device
indicated prior multiple exposures to electrical, mechanical or environmental
tests.
• Without knowledge of the application of these tests or their specific
conditions, BAE Systems was not able to judge the potential for damage
to these devices or the effect of this previous testing on total product life
expectancy.
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15. Authentic perhaps, but where have they been? …
• Many parts acquired from Independent Distributors may be authentic,
but show evidence of …
• Poor storage and handling conditions
• Termination refurbishing or reclamation
• To ensure confidence that parts are of the same quality and reliability as
when first shipped by the original component manufacturer, users
should apply a suite of test and inspection protocols to …
• Detect counterfeits and eliminate defects associated with handling and
storage, and with termination refurbishing or reclamation.
• Consider life testing as an option to obtain a high level of confidence of
failure free performance and to produce test results needed to support an
assembly/system level reliability assessment.
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16. Conclusions
• Inspections and tests can reduce the risk of receiving counterfeit parts from
Independent Distributors, but there is no fail safe method …
• Individual methods may not …
• Definitively distinguish authentic parts
• Detect damage induced by inadequate handling and storage, termination
refurbishing, or reclamation
• A suite of inspections and tests are necessary to …
• Detect counterfeits and eliminate defects associated with handling and storage,
and with termination refurbishing or reclamation.
• Establish high level of confidence of failure free performance and to support an
assembly/system level reliability assessment.
• The most effective approach to avoiding counterfeit electronic components is to
purchase product directly from the original manufacturer, or from a distributor,
reseller or aftermarket supplier who is franchised or authorized by the original
manufacturer.
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17. Approaches to reduce the potential of acquiring
counterfeit electronic components
Henry Livingston, BAE Systems Electronic Solutions
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18. Franchised and Authorized Distributors
• The most effective approach to avoiding counterfeits is to purchase product …
• Directly from the original manufacturer, or
• From a distributor, reseller or aftermarket supplier who is franchised or authorized by
the original manufacturer
• Franchise agreements between the original manufacturer and the distributor
typically include …
• Original manufacturer warranty
• Product integrity via proper handling, storage and shipping procedures
• Failure analysis and corrective action support
• Traceability via certificates of conformance and acquisition traceability
• Franchised distributors include large and small businesses,
including Small Disadvantaged Businesses (SDB)
• A substantial number of products, however, are no longer available through
these channels.
• Independent Distributors will continue fill this gap.
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19. Independent Distributors
• Independent Distributors purchase new excess inventories from end users with
the intention to sell and redistribute back into the market.
• Independent Distributors subsequently sell (re-distribute) the new parts from
these excess inventories to fulfill inventory shortages with hard-to-find, obsolete,
and competitively priced parts.
• End users are typically original equipment manufacturers (OEMs) and contract
manufacturers (CMs) at locations all over the world.
• Independent Distributors do not typically have limiting contractual agreements
or obligations to the components manufacturers.
From …
IDEA-STD-1010-A, Acceptability of Electronic Components Distributed in the Open Market.
Copyright © Independent Distributors of Electronics Association (IDEA) 2006 (http://www.idofea.org/)
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20. Risk Mitigation Methods to Avoid Counterfeit Electronic
Components
• The following mitigation methods can be applied to reduce the risk of
receiving counterfeit parts when purchasing from an Independent
Distributor …
• Traceability Documentation
• Without certificates of conformance and acquisition traceability,
the purchaser takes on unknown risks.
• The Independent Distributor’s own acquisition certification should be in
addition to the certificates of conformance and acquisition traceability
provided by the manufacturer and previous distributors.
• Handling and Storage Verification
• Compliance Verification (authenticity analysis)
• Visual Inspection
• Testing
• Physical Analysis
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21. Counterfeit Detection
• GIDEP documents reporting suspect counterfeit cases provide further
insight into detection techniques
• The SAE G-19 developed a new aerospace standard …
• AS5553, Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and
Disposition (http://www.sae.org/ )
• The Independent Distributors of Electronics Association (IDEA)
published a standard which includes inspection techniques for
counterfeit detection …
• IDEA-STD-1010-A, Acceptability of Electronic Components Distributed in
the Open Market. © Independent Distributors of Electronics Association
(IDEA) 2006 (http://www.idofea.org/)
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22. Strategic and Proactive Approaches
• Independent Distributor Selection
• Outsourcing Electronic Component Procurement
• Aftermarket Supply Monitoring
• Diminishing Manufacturing Sources and
Material Shortages (DMSMS) Management
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23. Independent Distributor Selection
• Source selection should include an assessment of the independent distributor’s
ability to verify the authenticity of the products they offer.
• Certificates of conformance and acquisition traceability
• Compliance verification via visual inspection, testing and physical analysis
• Purchasing and acceptance practices
• Examples of industry standards that can be used for evaluating the suitability of
an independent distributor
• AS5553, Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition
(http://www.sae.org/)
• JESD31, General Requirements for Distributors of Commercial and Military Semiconductor
Devices. (http://www.jedec.org/download/)
• IDEA-STD-1010-A, Acceptability of Electronic Components Distributed in the Open Market.
Copyright © Independent Distributors of Electronics Association (IDEA) 2006
(http://www.idofea.org/)
• Vet the independent distributor in advance of procurement activity to ensure …
• Suspect counterfeiting incidents have not occurred previously with this distributor
• The independent distributor has the financial means to support any contractual
guarantees expected
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24. Outsourcing Electronic Component Procurement
• Some users outsource procurement to another entity
• Electronics Manufacturing Service (EMS) provider
• Contract Manufacturer
• The selection of an EMS provider or Contract Manufacturer should
include audits of their methods and purchasing records to ensure their
procurement practices mitigate the risk of acquiring counterfeit parts.
• Refer to “Independent Distributor Selection”
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25. Aftermarket Supply Monitoring
• Some aftermarket sources produce finished products from a die bank
• Residual inventory of die no longer in production
• These aftermarket sources do not always issue End-of-Life notices or
notify their industry and Government customers when die inventory is
exhausted
• In one case, DSCC (not the aftermarket manufacturer) issued a notice when
notified that die inventory had been exhausted
• A review of the GIDEP database showed no DMS notices issued by this
manufacturer
• End-of-Life notices were not published on the manufacturer’s website
• Users are encouraged to periodically contact aftermarket sources
concerning their continued ability to supply products
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26. Diminishing Manufacturing Sources and
Material Shortages (DMSMS) Management
• A significant driver for the use of Independent Distributors is the continued need
for parts that are no longer produced by the original manufacturer.
• In order to reduce the likelihood of having to purchase parts through an
independent distributor, Original Equipment Manufacturers should …
• Proactively manage the life cycle of their products versus the life cycles of the parts
used within them.
• Engage customers on the necessity to support and fund DMSMS management
approaches that eliminate the use of obsolete parts.
• Government and Industry documents …
• SD-22: Department of Defense (DOD) Diminishing Manufacturing Sources and
Material Shortages (DMSMS) Guidebook
• GEIA GEB1: Diminishing Manufacturing Sources and Material Shortages (DMSMS)
Management Practices, Government Electronics and Information Technology
Association
• EIA-4899: Standard for Preparing an Electronic Components Management Plan
• IEC TS 62239: Process Management for Avionics – Preparation of an Electronic
Components Management Plan
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27. Summary
• In today’s supply chain environment, Original Equipment Manufacturers and Government
users must be vigilant in order to avoid counterfeit electronic components.
• The vast majority of counterfeit cases reported are associated with purchases through
independent distributors.
• The most effective approach to avoiding counterfeit electronic components is to purchase
product directly from the original manufacturer, or from a distributor, reseller or
aftermarket supplier who is franchised or authorized by the original component
manufacturer.
• A substantial number of products, however, are no longer available through franchised or
authorized suppliers.
• While they provide a necessary function within the electronic component supply chain,
independent distributors are not all created equal.
• Original Equipment Manufacturers and Government users need to understand the independent
distributor’s operations and business processes.
• When considering purchases through Independent Distributors, Original Equipment Manufacturers
and Government users should use mitigation methods and strategic approaches to reduce the
potential for acquiring counterfeit parts.
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