NCIS (The Naval Counter Intelligence Service) strikes again!  To date there have been three significant raids on electronic component distributors selling counterfeits.  MVP, VisionTech, and now Epic International Electronics, Inc.  NCIS and Methuen police officers confiscated electronics as evidence to begin their case against the couple working out of their home in Methuen, MA.  AERI had also received counterfeits early on from their former named company Tytronix, Inc. and removed them from our AVL.  Since that time it appears as though they have been reported for selling counterfeits by several industry websites.  It is still hard to believe that companies which are reported for selling counterfeits on multiple occasions could continue to have a customer base.  It just shows you that there are plenty of OEM’s and CEM’s not doing their homework when selecting a distributor.  If all manufacturers were careful selecting their broker and they trusted them when they said “There is nothing out there that we trust to buy for you”, then all of these companies would go out of business fast.  There are at least a hundred more of these companies out there.  If you are not already using an independent distributor with a known good reputation, the proper equipment to detect counterfeits, and conducted an audit of their facilities, it’s time to do so now.  Don’t find yourself in a counterfeit component disaster.  See this link to read more.

Here is a fun example that allowed us to detect these fakes with multiple blatant clues. 

Clue #1; During our inspection process we dip humidity indicator cards (HIC) in water to see if they are real HIC cards or if they have been made just to fool the unsuspecting buyer.  This HIC did not even respond by turning pink while under the water. 

Clue #2; We are careful to read the labels provided with the package to see if the information is correct and there are no misspellings.  This label was loaded with misspellings. 

 Clue #3; Obvious blacktopping easily removed with acetone.   

Clue #4; Re-tinned leads

 Whenever you are receiving parts make sure to use all the tools at your disposal.  Each type of examination gives either more confidence or builds your case against the suspect components.  We must utilize profiling, as described in the judicial/political world, when dealing with unauthorized distributors.   In todays open market you must consider all parts from the open market guilty (suspect counterfeit) until proven innocent.  We cannot use a fair legal system when subjecting these part to their trial.

For those of you who are fascinated in technology history, National Public Radio did an amazing story on Silicon Valley, which included the roots of the semiconductor industry.  It begins with the story of the men involved in the invention of the transistor and their struggles to get anyone to have faith in them to invest in their ideas.  It is hard to imagine that there would have been any doubt in this amazing technology looking back.  It then takes you through the progression of the growth of the semiconductor and the men and companies that made it happen.  Click here to learn more.

AERI has extended its reach into Europe with the opening of the London office.  Our company has long done business in the region, but this will solidify our commitment to offer a full service solution to our European customers.  The office is staffed with long time professionals from the independent distribution industry who hold the same high values of customer service and quality products as the staff from the corporate office in the US.   AERI is open 24 hours a day with its offices in the US, Asia and now Europe. 

The Government Accountability Office (GAO) released findings today with regard to blatant counterfeit electronic components readily available for purchase in a report called, ”DOD Supply Chain: Suspect Counterfeit Electronic Parts Can Be Found on Internet Purchasing Platforms”  This report details how, using a fictitious business name, the GAO bought 16 different groups of parts from 13 different distributors in China and every single part they received was counterfeit.  Some of the parts the GAO ordered were not even real part numbers, but the Chinese distributors supplied them anyway.  “These findings should outrage every American,” said Senator Carl Levin who is Chairman of the Senate Armed Services Committee. ”GAO`s finding that every single counterfeit part that they bought online came from suppliers in China, while not surprising, is deeply troubling. The Chinese government`s refusal to shut down counterfeiting that occurs openly in their country puts our national security and the safety of our military men and women at risk. Not only that, but it also costs thousands of American jobs.”   We at AERI know that this is the reality of the component market.  Our purchasing and quality control process have been prepared to handle this dilemma for years.   It is amazing that many manufacturers or electronic equipment are still buying from brokers who are allowing these fakes to get through.  Brokers tell their usual story about their expert detection capabilities.  OEM’s need to get out there and audit their suppliers to make sure they are not a victim of a counterfeit disaster.  See more details about the GAO report at the following link.

When testing for blacktopping on IC’s the use of acetone has been the accepted method used when inspecting parts purchased from the open market.  The counterfeiters figured out years ago that acetone was being used and they have adapted by getting smarter.  Many of the top coatings now are baked on using acetone resistant materials.  Using a simple razor blade is an easy way to test any top coating.  Sometimes the results are hard to read, but it is usually clear that there is a layer on top of the plastic if you are using a microscope. Here is a great example of some parts that we caught today.

Every distributor must be careful that they are not exporting to customers like the one described in this story.  There are procedures that can be put in place to investigate potential customers before selling to them which includes obtaining a statement from each customer requesting the products end use.  This document should contain the consequences of the actions described in this story  as well.  You may contact Ian Cosley, at our California facility, if you would like to see AERI’s procedure and try to implement a new program in your firm.  See the above link for the full story about this FBI takedown.

We continue to hope with the greater awareness about counterfeits that the crooks will go out of business and this problem will quietly go away.  The opposite seems to be happening.  Even though almost everyone is aware of the problem there are more and more counterfeits being reported every year.  There are no good answers yet to stop the flow of counterfeits into the supply chain.  The used part supply continues to be fed from the wealthy nations to the developing countries where they refinish the parts and send them easily back to unsuspecting buyers.  See this link for more details.

The amazing volume of products that Apple is producing and selling is unthinkable.  Apple sold 17 million computers, 38 million iPods, 40 million iPads and 93 million iPhones last year.  How can one company produce all of this.  There has been much news about Foxconn’s factory workers committing suicide and their struggles related to being uprooted from rural to urban life.  Finally we are able to see how this machine is working from the inside.

The iPad 3 is expected to be announced very soon, but there are already problems facing delivery.  Due to some enhancements and supplier changes there is likely to be an immediate shortage of the new devices.  This will likely only make it look more exclusive and create a greater desire to own an Apple.  Click here for more details.