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Evolving Counterfeit Component Threats and Industry Mitigation Efforts Stephen Schoppe Glenn Robertson Process Sciences, Inc. Leander, Texas 512.259.7070www.process-sciences.com.

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Presentation on theme: "Evolving Counterfeit Component Threats and Industry Mitigation Efforts Stephen Schoppe Glenn Robertson Process Sciences, Inc. Leander, Texas 512.259.7070www.process-sciences.com."— Presentation transcript:

1 Evolving Counterfeit Component Threats and Industry Mitigation Efforts Stephen Schoppe Glenn Robertson Process Sciences, Inc. Leander, Texas www.process-sciences.com

2 Introduction A growing problem in all industry sectors A growing problem in all industry sectors Openings for counterfeiting Openings for counterfeiting High price componentsHigh price components High demand/scarcityHigh demand/scarcity Obsolete/out of productionObsolete/out of production Potential for introducing malicious code Potential for introducing malicious code Sabotage – immediate or futureSabotage – immediate or future Potential espionagePotential espionage

3 Introduction How do counterfeits enter the supply chain? How do counterfeits enter the supply chain? Often starts with remarking of reclaim/eWasteOften starts with remarking of reclaim/eWaste Refurbished used part represented as new Refurbished used part represented as new Altered date code Altered date code Consumer grade marked as mil Consumer grade marked as mil Upgrade to later/preferred/scarce part type Upgrade to later/preferred/scarce part type Low-grade passives marked as precision value (low tolerance) type Low-grade passives marked as precision value (low tolerance) type Completely different part Completely different part Manufacturing defects diverted from scrap binManufacturing defects diverted from scrap bin Surplus production from OEM (“4 th shift”)Surplus production from OEM (“4 th shift”) Acquisitions/Purchase of surplus inventoriesAcquisitions/Purchase of surplus inventories Return of mixed inventories to distributorReturn of mixed inventories to distributor

4 Mitigation Strategies - Users Essential to establish Due Diligence Essential to establish Due Diligence Establish supply chain policies Establish supply chain policies Evaluate risks from “lowest bidder”Evaluate risks from “lowest bidder” Use authorized distributors where possibleUse authorized distributors where possible Write purchase contract carefullyWrite purchase contract carefully Supplier QualificationSupplier Qualification History with reporting organizations - BBB, D&B, etc. History with reporting organizations - BBB, D&B, etc. Google search, including street view of address Google search, including street view of address Memberships – ERAI, GIDEP, IDEA etc. Memberships – ERAI, GIDEP, IDEA etc. Certifications - ISO, IDEA-1010, CCAP-101, etc. Certifications - ISO, IDEA-1010, CCAP-101, etc. Quality systems for receiving inspection, ESD, etc. Quality systems for receiving inspection, ESD, etc. Onsite audit if possible Onsite audit if possible

5 Mitigation Strategies - Users Access to industry database(s) Access to industry database(s) Decision process for authentication testing and quarantine/reporting of suspect parts Decision process for authentication testing and quarantine/reporting of suspect parts Disposition Disposition Don’t just return to distributor inventoryDon’t just return to distributor inventory Destroy & verify?Destroy & verify? Staff training/qualification Staff training/qualification

6 Mitigation Strategies - Distributors Anti-Counterfeit Policies Anti-Counterfeit Policies Increased scrutiny of sourcesIncreased scrutiny of sources Awareness of evolving counterfeiting methodsAwareness of evolving counterfeiting methods Use of industry resources – ERAI, GIDEP, IDEAUse of industry resources – ERAI, GIDEP, IDEA Establish incoming inspection proceduresEstablish incoming inspection procedures Authentication testing – in house or outsource Authentication testing – in house or outsource Staff training/qualification Staff training/qualification

7 Industry Mitigation Efforts Counterfeits Databases Counterfeits Databases Searchable databases of suspect componentsSearchable databases of suspect components Information from reports submitted online Information from reports submitted online Only members can access, anyone can submit report Only members can access, anyone can submit report GIDEP (www.gidep.org)GIDEP (www.gidep.org) Operated by US Government, established 1959 Operated by US Government, established 1959 ERAI (www.erai.com)ERAI (www.erai.com) Privately held reporting and investigation service Privately held reporting and investigation service Escrow and dispute resolution services Escrow and dispute resolution services IDEA (www.idofea.org)IDEA (www.idofea.org) Privately held association Privately held association Maintains extensive Membership Code of Ethics Maintains extensive Membership Code of Ethics

8 Industry Mitigation Efforts Standards Organizations Standards Organizations SAE G19 CommitteeSAE G19 Committee “chartered to address aspects of preventing, detecting, responding to and counteracting the threat of counterfeit electronic components” AS5553 (released 2009, rev A in progress) AS5553 (released 2009, rev A in progress) Counterfeit avoidance requirements for OEMs and CMsCounterfeit avoidance requirements for OEMs and CMs Adopted by DODAdopted by DOD AS6081 (released December 2011) AS6081 (released December 2011) Similar to AS5553Similar to AS5553 Prescriptive avoidance requirements for distributorsPrescriptive avoidance requirements for distributors AS6171 (in preparation) AS6171 (in preparation) Intended to standardize test methodsIntended to standardize test methods Covers a variety of testsCovers a variety of tests Includes sampling plansIncludes sampling plans ARP6178 (in preparation) ARP6178 (in preparation) Methods for risk assessment of distributorsMethods for risk assessment of distributors

9 Industry Mitigation Efforts Standards Organizations (continued) Standards Organizations (continued) IDEA (Independent Distributors of Electronics Assoc.)IDEA (Independent Distributors of Electronics Assoc.) IDEA-STD-1010B IDEA-STD-1010B Visual inspection practices and requirements Visual inspection practices and requirements Includes acceptability criteria Includes acceptability criteria ISO (Europe)ISO (Europe) PC 246 and TC 247 committees established (2009) to develop standards related to combating fraud PC 246 and TC 247 committees established (2009) to develop standards related to combating fraud Coordinating with ANSI in USA Coordinating with ANSI in USA iNEMI ConsortiumiNEMI Consortium Develop and assess improved methods for data exchange, authentication and traceability Develop and assess improved methods for data exchange, authentication and traceability Includes development of metrics to assess the problem and measure program(s) effectiveness/cost Includes development of metrics to assess the problem and measure program(s) effectiveness/cost

10 Industry Mitigation Efforts Training & Certification Programs Training & Certification Programs IDEAIDEA Certification to IDEA quality standards Certification to IDEA quality standards Inspector training and certification based on 1010B Inspector training and certification based on 1010B CTI CCAP ProgramCTI CCAP Program Counterfeit components avoidance and certification program for Independent Distributors Counterfeit components avoidance and certification program for Independent Distributors Training addresses detection and prevention of counterfeit components Training addresses detection and prevention of counterfeit components Seminars and Workshops from SMTA, CALCE, and other organizationsSeminars and Workshops from SMTA, CALCE, and other organizations

11 Government Initiatives International efforts to reduce supply International efforts to reduce supply Take-back lawsTake-back laws Divert eWaste to reuse/recycle Divert eWaste to reuse/recycle Varies by country/state Varies by country/state Restrictions on eWaste disposalRestrictions on eWaste disposal Regulated under the Basel Convention on Hazardous Waste (1992) Regulated under the Basel Convention on Hazardous Waste (1992) Includes 170 member countries, USA not a member Includes 170 member countries, USA not a member Regulated in USA under RCRA as “Hazardous Waste” Regulated in USA under RCRA as “Hazardous Waste” Currently no provisions specific to eWasteCurrently no provisions specific to eWaste Possible future updatesPossible future updates Direct USA diplomatic initiativesDirect USA diplomatic initiatives

12 Government Initiatives Increased US Customs Scrutiny Increased US Customs Scrutiny Congress hearings/proposed legislation Congress hearings/proposed legislation National Defense Authorization Act (FY ’12) National Defense Authorization Act (FY ’12) Levin/McCain amendment provisionsLevin/McCain amendment provisions Requires DOD to define “counterfeit part” Requires DOD to define “counterfeit part” Increases counterfeiting penalties for DOD contracts Increases counterfeiting penalties for DOD contracts Requires improved counterfeit avoidance methodology for DOD and its contractors Requires improved counterfeit avoidance methodology for DOD and its contractors Mandatory counterfeits reporting (when discovered) for military and DOD contractor personnel Mandatory counterfeits reporting (when discovered) for military and DOD contractor personnel Contractors are responsible for remediation cost when counterfeits are discovered Contractors are responsible for remediation cost when counterfeits are discovered

13 Authentication Testing The second line of defense The second line of defense Non-Destructive (sampling or 100%) Non-Destructive (sampling or 100%) Visual/Component dataVisual/Component data Radiographic (X-ray)Radiographic (X-ray) X-ray Fluorescence (XRF) X-ray Fluorescence (XRF) Electrical testElectrical test DC DC Functional Functional Destructive Destructive Reveals surface of Silicon chipReveals surface of Silicon chip Chemical Decapsulation or Mechanical DelidChemical Decapsulation or Mechanical Delid

14 Authentication Testing External Visual Inspection External Visual Inspection Inspect external packaging materials and labelsInspect external packaging materials and labels Compare appearance and font/symbology with “Golden” part if availableCompare appearance and font/symbology with “Golden” part if available Inspect package for evidence of remarking:Inspect package for evidence of remarking: Blacktopping Blacktopping Sanding scratches Sanding scratches Discrepancies in surface texture Discrepancies in surface texture

15 Authentication Testing External Visual Inspection External Visual Inspection Inspect Lead ConditionInspect Lead Condition Surface Appearance Surface Appearance Straightness and Coplanarity Straightness and Coplanarity Marking permanency testMarking permanency test Mineral Spirits (JEDEC Mineral Spirits (JEDEC JESD22-B107C) MEK, Acetone, Alcohol also used MEK, Acetone, Alcohol also used Change in markings or surface appearance/texture Change in markings or surface appearance/texture

16 Check component information Check component information Consult Manufacturers’ Data SheetsConsult Manufacturers’ Data Sheets OCMs data sheets/websites OCMs data sheets/websites Distributors Distributors Other sources (e.g., prior inspections, customer data) Other sources (e.g., prior inspections, customer data) Date/Lot Code historiesDate/Lot Code histories Company historiesCompany histories SC OEMs SC OEMs Mergers, name changes, plant closings/relocations Mergers, name changes, plant closings/relocations Authentication Testing

17 Radiographic Inspection Radiographic Inspection Solder ball patternSolder ball pattern Chip size/countChip size/count Wire bond count/pitchWire bond count/pitch Flip chip bump count/pitchFlip chip bump count/pitch No need to open packageNo need to open package Possible radiation damage – currently under evaluation by G19 Radiological Inspection SGPossible radiation damage – currently under evaluation by G19 Radiological Inspection SG Authentication Testing

18 XRF Testing XRF Testing Rapid semi-quantitative elemental analysisRapid semi-quantitative elemental analysis Typically used for:Typically used for: RoHS compliance screening RoHS compliance screening Verify Pb-free lead finish, or presence where required Verify Pb-free lead finish, or presence where required Ceramics analysis (typically caps) Ceramics analysis (typically caps)

19 Authentication Testing Electrical testing Electrical testing Broad range of tests depending on component type and level of riskBroad range of tests depending on component type and level of risk DC testing (VOM, curve tracer) for discretesDC testing (VOM, curve tracer) for discretes ICs/actives require specialized test equipment and programmingICs/actives require specialized test equipment and programming Basic functional test vs full specification rangeBasic functional test vs full specification range

20 Authentication Testing Chemical Decapsulation Chemical Decapsulation Exposes surface of Silicon chipExposes surface of Silicon chip Used on epoxy packagesUsed on epoxy packages Acid etching most commonAcid etching most common

21 Authentication Testing Mechanical Delidding Mechanical Delidding Metal or ceramic packagesMetal or ceramic packages Diamond saw or DremelDiamond saw or Dremel Lid pry-offLid pry-off

22 Some Concerns Increased direct and indirect costs Increased direct and indirect costs Maintain process documentation/certificationsMaintain process documentation/certifications Staffing/trainingStaffing/training Cost and time required for testingCost and time required for testing Authentication testing issues Authentication testing issues Availability of historical data – date codes, etc.Availability of historical data – date codes, etc. New remarking methodsNew remarking methods New Blacktop material resistant to test solvents New Blacktop material resistant to test solvents Use of micro-sandblasting to remove original markings – now under study by G19 SG Use of micro-sandblasting to remove original markings – now under study by G19 SG Functional test challengesFunctional test challenges Test equipment/fixtures availability and support Test equipment/fixtures availability and support Availability of programming expertise Availability of programming expertise

23 Some Concerns Legal Legal Clear agreed definitions for “counterfeit,” “fraudulent,” “suspect,” etc.Clear agreed definitions for “counterfeit,” “fraudulent,” “suspect,” etc. Clarify mandatory reporting requirementsClarify mandatory reporting requirements By whom and to whom? By whom and to whom? When required? – includes “suspect” parts? When required? – includes “suspect” parts? Protection of customer/supplier confidentiality Protection of customer/supplier confidentiality Define liabilitiesDefine liabilities Parts falsely identified as non-conforming (alpha risk) Parts falsely identified as non-conforming (alpha risk) Failure to identify counterfeits (beta risk) Failure to identify counterfeits (beta risk) Responsibilities for consequences of incorporation of counterfeits into equipment Responsibilities for consequences of incorporation of counterfeits into equipment Evaluate/maintain/demonstrate “Due Diligence”Evaluate/maintain/demonstrate “Due Diligence”

24 Conclusions Counterfeits constitute a serious and growing threat for users of electronics Counterfeits constitute a serious and growing threat for users of electronics Government and industry mitigation efforts are ongoing Government and industry mitigation efforts are ongoing Procedural, communication, training, etc.Procedural, communication, training, etc. Technical solutionsTechnical solutions Users and distributors must assess their risk and establish a comprehensive plan Users and distributors must assess their risk and establish a comprehensive plan Challenge to balance risks vs. costsChallenge to balance risks vs. costs Counterfeit threats always evolvingCounterfeit threats always evolving Authentication testing for suspect componentsAuthentication testing for suspect components Maintain awareness of legal requirementsMaintain awareness of legal requirements

25 Conclusions “There is a flood of counterfeit microchips into the military, including in critical weapons systems… The counterfeiters are utterly ruthless, nimble, and getting increasingly better at their copies.” - Dr. James A. Hayward, Applied DNA Sciences “No one practice or combination of practices will prevent counterfeit components from entering the supply chain, but every element of the supply chain must work together to solve the problem.” “No one practice or combination of practices will prevent counterfeit components from entering the supply chain, but every element of the supply chain must work together to solve the problem.” - Dan DiMase, G19 Committee Chairman

26 Some References Defense Industrial Base Assessment:Counterfeit Electronics, report available at Best Practices in the Fight Against Global Counterfeiting, report available at US Senate Passes Anti-Counterfeit Electronics Bill, article available at China Counterfeit Parts in U.S. Military Boeing, L3 Aircraft, article available at Counterfeit Parts Control Plan Implementation, presentation by Dan DiMase, available at list of UK-based resources ERAI, IDEA, GIDEP websites LinkedIn anti-counterfeiting groups Missile Defense Agency Will Fight Parts Defects, article available at crack-down-on-poor-quality.html

27 Thank You! Questions…? Glenn Robertson Stephen Schoppe


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