Sentencing Marks Progress in Fight Against Semiconductor Counterfeiting

by Semiconductor Industry Association

WASHINGTON—Oct. 6, 2015—The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing and design, today applauded the work of law enforcement following the sentencing of Peter Picone, a confessed counterfeit semiconductor trafficker. Last June, Picone admitted to sending counterfeit semiconductors to the U.S. Naval Submarine Base in Connecticut, where the semiconductors were intended for use in nuclear submarines. Officials from the Defense Department, Navy, Department of Justice, and Homeland Security Department worked to bring Picone to justice, leading Picone to plead guilty to charges of conspiracy to traffic in counterfeit military goods. Today’s sentencing of 37 months marks one of the most severe punishments to date in a case involving counterfeit semiconductors.

“Today’s sentencing is a warning to those involved in semiconductor counterfeiting – you do the crime, you do the time,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Counterfeit semiconductors pose a danger to public health and safety, and in the Picone case, could have compromised critical military systems. Semiconductor companies will continue to work with law enforcement officials to root out counterfeit semiconductors, identify and pursue counterfeiters, and prosecute them to the full extent of the law.”

The threat of counterfeit semiconductors can be greatly reduced by taking one simple, straightforward action: buying semiconductor products either directly from Original Component Manufacturers (OCMs) or their authorized distributors or resellers. SIA has long stressed the importance of buying from authorized sources, and this was the chief recommendation of SIA’s anti-counterfeiting whitepaper.

A Department of Defense (DoD) rule finalized last year takes an important step in the right direction by implementing needed safeguards in the procurement of semiconductors and other electronic parts used by our military. Non-military purchasers of semiconductor products should follow DoD’s lead and prioritize purchases from authorized sources.

“By working together to punish counterfeiters and to implement common-sense policies that safeguard the government procurement process, we can stem the tide of counterfeit semiconductor products and help ensure the safety of technologies that are vital to America’s economic and national security,” Neuffer said.

About SIA

The Semiconductor Industry Association (SIA) is the voice of the U.S. semiconductor industry, one of America’s top export industries and a key driver of America’s economic strength, national security, and global competitiveness. Semiconductors – microchips that control all modern electronics – enable the systems and products we use to work, communicate, travel, entertain, harness energy, treat illness, and make new scientific discoveries. The semiconductor industry directly employs nearly a quarter of a million people in the U.S. In 2014, U.S. semiconductor company sales totaled $173 billion, and semiconductors make the global trillion dollar electronics industry possible. SIA seeks to strengthen U.S. leadership of semiconductor manufacturing, design, and research by working with Congress, the Administration and other key industry stakeholders to encourage policies and regulations that fuel innovation, propel business and drive international competition.