Sniffing out counterfeit electronics

Inspectors ramp up efforts as danger of sham equipment rises

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WICHITA, Kan. -- At Integra Technologies, inspectors spend their days studying electronic parts to see if they are counterfeits.

Using high-powered microscopes, they look for signs that an integrated circuit, or chip, has been remarked, reworked or otherwise tampered with. About 10 to 20 percent of the parts tested for counterfeiting turn out to be bogus.

Detection has never been more important, said Mark Marshall, Integra Technology's vice president of engineering.

Many of the chips are to be used by defense contractors or aviation manufacturers. Some may be installed in radar, missiles, flight control systems, communications systems, engine controls or in other critical applications. Their failure could be not just detrimental but deadly.

Counterfeiting has gained national and congressional attention.

A yearlong U.S. federal probe concluded this year found 1,800 cases of bogus parts, totaling more than 1 million actual devices, used during 2009 and 2010. More than 70 percent of the parts tracked were traced to China.

The investigation found bogus parts were used in military systems, including in thermal weapons sights delivered to the Army, on mission computers used on high-altitude missiles and on a number of military airplanes.

For example, last year Raytheon Co. alerted the Navy that electronic parts suspected to be counterfeited had been installed on three filters used in a night vision system called Forward Looking Infrared.

Counterfeiting threatens national security, the safety of U.S. troops and American jobs, Sen. Carl Levin, D-Mich., said in a statement in May following the release of a report by the Senate Armed Services Committee, which launched the investigation in March 2011.

Defense contractors usually have the biggest problem, Mr. Marshall said.

They buy small volumes and need chips to last much longer than when the chips are used in consumer applications.

The problem arises when manufacturers need replacement parts but they're no longer made, or the manufacturer hasn't made them for several years. So they turn to brokers or independent distributors to find them.

"It's become a minefield," Mr. Marshall said. "Even the best brokers still end up with counterfeit parts from time to time."

Counterfeiting activity began with "e-waste" from old computers, monitors and other electronics.

The idea was to recycle and save them from a landfill. So recyclers bundled up the old electronics. Much of it went to China.

"That's what started this whole mess," Mr. Marshall said.

In the past five years, the problem has exploded -- and counterfeiters have gotten smarter and harder to catch. They've improved their techniques and methods to avoid detection.

"They're much more sophisticated now," Integra Technologies president Becky Craft said. "They know people are looking."

Mr. Marshall doesn't see a solution in the short term. For the counterfeiters, "there's too much money to be made," he said.

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