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SIA President Says Counterfeit Chips Pose Threat to U.S. Citizens

Counterfeit electronic components threaten the safety of U.S. citizens and military personnel, result in lost jobs for Americans and violate intellectual property rights of U.S. companies, according to the president of the Semiconductor Industry Association.

Testifying at a U.S. Senate Armed Services Committee hearing, Brian Toohey said the “catastrophic failure risk inherently found in counterfeit semiconductors places our citizens and military peril in unreasonable peril.”

“A counterfeit semiconductor is a ticking time bomb,” Toohey added.

The Senate Armed Forces committee is investigating the problem of counterfeit electronic parts in the Department of Defense (DOD) electronics supply chain.

Counterfeit semiconductors are a growing threat to the health and safety and civilians, according to the SIA. Semiconductors are used in many mission-critical applications such as medical devices, automobile safety systems, airplanes, tools, and communications equipment that the US military uses.

Counterfeit parts are also costly to American companies. “We estimate that counterfeiting costs U.S.-based semiconductor companies more than $7.5 billion each year,” said Toohey.

He noted that counterfeit electronics in the DOD supply chain is a multi-faceted problem which requires a coordinated effort from both industry and government. The SIA says five steps should be taken to thwart counterfeit parts including:

  • Partnerships between industry and the DOD and Department of Justice (DOJ) to develop a more robust and effective authentication system.
  • Strengthening procurement procedures at DOD for mission-critical components, including purchasing exclusively from authorized distributors.
  • Ensuring the industry’s ability to fully partner with Customs and Border Patrol officials to stop suspected counterfeits at the border by ending CBP's redaction policy.
  • Aggressively prosecuting counterfeit traffickers.
  • Stronger enforcement of intellectual property rights internationally.

The semiconductor industry is committed to working with the DOD and other government agencies to stop counterfeit parts from “entering the U.S. and our military and civilian supply chains,” according to Toohey.