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Counterfeiting Could Happen To You

The threat of counterfeit parts hangs over the entire electronics industry. Yet this topic has not gotten too much attention in this industryeven though microwave and RF companies have discovered that counterfeit products were being created and sold to their customers. In addition to implementing some protective measures for their procurement processes, companies in the US can feel some relief that the Department of Justice is taking a very hard line when it comes to prosecuting such offenses. At the end of last month, the US Federal Court sentenced the first convicted felon of counterfeit integrated-circuit (IC) trafficking.

According to the Semiconductor Industry association (SIA), VisionTech Components (Clearwater, FL) knowingly sold counterfeit ICs to approximately 1101 buyers in the US and abroad from 2006 to 2010. Among them were counterfeit ICs destined for military applications. For her part in the scheme, VisionTech Component's Administrator, Stephanie McCloskey, was sentenced to 38 months imprisonment and $166,141 in fines.

The SIA explains that VisionTech Components created a website that purportedly sold name-brand ICs. Those ICs, which bore counterfeit marks, were primarily acquired from sources in China. they were then imported into the US for sale to the public. VisionTech and its directors had reportedly generated more than $15.8 million in gross receipts through the sale of inexpensive, counterfeit ICs that were falsely marked as military, commercial, or industrial grade.

Of course, companies that order such parts do not usually detect their counterfeit nature at first. Yet the results of using these faulty parts range from losing a good brand reputation for poor performance in consumer products to life-threatening situations caused by the failure of mission-critical systems. VisonTech, for example, knowingly sold counterfeit ICs to defense contractors and manufacturers of products like brakes for high-speed trains and instruments that would help firefighters detect nuclear radiation. In doing so, it literally put lives at risk.

Thankfully, counterfeit parts are usually detected before tragedy occurs. according to Dale Lillard, President of Lansdale Semiconductor, Inc., "Board-level and box-level testing will catch a majority of the package-related counterfeits before they impact a system in the field." Lillard advises companies to always begin their selection process by checking procurement records for product that has not been purchased and stored for future use. After confirming that all inventory is genuine, procurement processes should be reviewed for areas of improvement. Incoming inspection procedures should be tightened to ensure that only legitimate product goes to the product line. (For more insight from Dale, please see this month's "Inside Track".) In addition to knowing that they have the backing of the US Justice System, such measures can help companies feel that they are doing what they can to combat counterfeiting.

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