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Counterfeit Chinese microelectronics impairing US defence equipment news
04 October 2008

Fake microchips flowing in from China have increased the vulnerability of US warplanes, ships, and communication networks, exposing them to potentially fatal equipment failure, compromising the operational efficiency of the US defence services.

Some of the worst sufferers are reported to be high tech finished product suppliers like BAE, Boeing Satellite Systems, Raytheon Missile Systems, Northrop Grumman Navigation Systems, and Lockheed Martin Missiles & Fire Control.

According to US defence department officials, the US forces have been receiving critical high-tech componenets made in unsecure locations over which they have no control thus potentially undermining their quality.

The reason that the defence establishment has no control over quality is its miniscule requirement that major suppliers are unwilling to meet on account of cost.

For instancce, fighter jets and military hardware use microelectronics in small quantities that are required to function eficiently in severe environments for the life of the product, which is often spread over years and even decades, leaving manufacturers unwilling to set up entire production lines to meet those specifications.
In contrast manufacturing of consumer technology products like cell phones and PDAs can turn out huge volumes as these products enjoy a rapid turnover, with durability not being a high priority.

This has pushed the Pentagon into placing orders with smaller parts brokers that have mushroomed in the US to provide low-cost items, including microchips in critical weapon systems. These brokers, though legitimate suppliers, do not have control  over what they eceive from suppliers, usually located in China, Hong Kong and Taiwan.

Moreover, the  largest, multibillion-dollar semiconductor plants  are now being built in China, which is particularly prone top counterfeiting. For instance, high tech routers from Cisco Systems, counterfeit flash-based products have been reported to being having been duplicated along with the packaging in the country.

Reports say these counterfeit products are packaged as finished products, such as memory cards or USB flash drives, from branded suppliers, with fake chips inside them.

Even counterfeit assmbly lines from reputed manufacturers along with their signages have ben reported to be operating in smaller Chinese locations.

Even discarded products  from garbage yards have been put back into distribution of technology products.

According to a media report, another reason has ben the US defence departments's obsession wth driving down procurement costs that has led to even offiical parts suppliers being forced  to increase their sourcing from Chinese suppliers. 

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Counterfeit Chinese microelectronics impairing US defence equipment