THE POLITICIZATION OF COUNTERFEIT ELECTRONICS
By Leonard Zuga and Michael Pecht

14 Dec 11. After more than a decade of neglect, counterfeit electronics has become a high profile issue, thanks to the U.S. Senate Armed Services Committee’s investigation of counterfeit electronic parts in military weapons systems and the proposed U.S. Senate Bill S.1228, known as the Combating Military Counterfeits Act of 2011. Unfortunately, neither Congress nor industry nor the press have been able to articulate the concurrent changes taking place in the global electronics industrial base that enabled and encouraged the electronics counterfeiting phenomenon. As a result, the solutions are for the most part illusory.

Coping with Counterfeit Parts is an Important Element of Providing Security and Reliability to the US and Allied Supply Base (Credit Image: Bigstock)In their paper “Bogus! Electronic Manufacturing and Consumers Confront a Rising Tide of Counterfeit Electronics,” IEEE Spectrum 45:5, 37-46 (May 2006), M. Pecht and S. Tiku noted that counterfeit electronics are not unique to military systems. They have also been found in computers and telecommunication products, automobiles, avionics, and many other systems. Whenever a product can be made at a lower cost than the original, counterfeiting can, and likely will, occur.

Counterfeiting will also be encouraged if there is a lack of supply of the original product. In fact, systems, such as those common in military weapons systems, that are in service for long periods of time are particularly susceptible to the counterfeiting of the components that compose these systems. The reason is primarily associated with obsolescence and the ensuing lack of availability of the original electronic components used in these systems. When the demand for replacement components becomes high, the prices of such components increase, thus providing counterfeiters with opportunities to profit. In addition, replacement of obsolete parts often leads to purchases from less reliable sources such as parts brokers and independent distributors instead of authorized distributors. In the case of brokers and independent distributors, the actual sellers are often unidentified. How this dependency on brokers and distributors evolved was becoming evident as early as 1995 as shown by Pecht in “Issues Affecting Early Affordable Access to Leading Electronic Technologies by the US Military and Government” (Circuit World 22:2, 1996). In the late 1960s, military electronics development began to become isolated from mainstream commercial electronics where a high volume of state-of-the-art technologies were being developed for everything from consumer to computer to automotive applications. Due to military-unique requirements, specifications, and generally unprofitable procurement policies, commercial technologies rapidly advanced beyond military electronic systems and most component manufacturers saw no need to provide the military with components. Soon after developing an understanding of this problem, U.S. Department of Defense (DoD) policy directives had begun to change by the mid 1990’s. Pecht’s historical analysis traced the development of military and government policies, regulations, and organizations that influenced both directly and indirectly, purposefully and accidentally, military systems electronics effectiveness and costs that culminated in the COTS concept and the inevitable rise of distributors as key entities in the military electronics supply chain. Though not obvious at the time, in retrospect it has been the military’s dependence on distributors and the use of unauthorized distributors, as opposed to direct procurement from manufacturers that have aided and abetted counterfeiters in developing their military market strategies. In reaction to the budgetary pressures of the early nineties, the U.S.
Department of Defense created the COTS (Commercial Off-The-Shelf) concept, eventually eschewing the long-h