Government’s DNA Marking Requirement Increases Risks of Counterfeit Chips

by Semiconductor Industry Association

America runs on semiconductors, the tiny chips that enable all electronics. But like many products, semiconductors can be counterfeited, and these counterfeits can end up in critical consumer, industrial, medical, and military devices. The potential failure of these products could undermine our public safety and national security. 

SIA is actively working to raise awareness of these threats and to reduce the supply of counterfeit chips. Working closely with distributors, customers and government agencies, SIA has developed proven approaches for avoiding counterfeit semiconductor products, outlined in a white paper titled Winning the Battle Aantgainst Counterfeit Semiconductors. The white paper’s chief recommendation is that semiconductor products should be purchased from either Original Component Manufacturers (OCMs) or their authorized distributors or resellers, since these are the most trustworthy sources of chips.

Unfortunately, a recent government requirement intended to mitigate the risks of counterfeit semiconductors has unintentionally had the opposite effect by making it harder to buy from OCMs and authorized distributors. The Defense Logistics Agency (DLA) – the agency responsible for procuring military equipment – is now requiring all chips that they purchase to be marked with plant DNA to ensure their authenticity. However, many OCMs and authorized distributors have decided the DNA marking program is ineffective, makes little sense and is too costly to implement. As a result, DLA’s purchases from authorized distributors have plummeted while purchases from less reputable brokers have skyrocketed.

To ensure the least amount of counterfeit products in any industry, the last thing you want to do is distance yourself from the manufacturer of the product. Regrettably, the DNA mandate has done just that. Consequently, the threat of counterfeit chips has been increased, not reduced. A Congressional Quarterly article (available here with subscription) from Dec. 16 takes a closer look at the DNA marking program and its unintended consequences.

The DNA marking program is the wrong solution to a growing problem. SIA is committed to continuing to work with government and other responsible parties in the supply chain to implement better, more workable solutions to the very serious threat that counterfeit semiconductors pose.

[Update: In an article in Military Embedded Systems from March 7, 2014, Lee Mathiesen of Lansdale Semiconductor explains why DLA’s claims about the DNA marking program are not correct.]