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America Semiconductor May 2014 EBNonline article

Securing the Semiconductor Supply Chain

Jeffrey Simon, Founder, America Semiconductor
5/8/2014   

Often, OEMs are left to worry about the problem of counterfeit semiconductors. Really, though, the semiconductor industry should be following some crucial guidelines to ensure the integrity of devices in the supply chain.

The danger of counterfeit or substandard semiconductor devices getting into a supply chain, especially when due to EOL events, is nothing new. However, OEMs still do not have an easy way to ensure that  devices purchased from unauthorized sources are genuine, or that the components have been properly stored and  handled. Procurement solution practices that implement a positive philosophy of only procuring devices directly  from the original semiconductor manufacturer (OSM), through an authorized distributor, or from an authorized continuing semiconductor manufacturer must be put into place for the semiconductor industry to move forward  without the threat of counterfeits.

The lack of proper and consistent testing exacerbates the issue. Testing and inspection protocols must be applied to all devices as a first line of defense. Three main types of testing protocols should be applied, including electrical testing (without short cuts), visual inspection, and destructive physical analysis (DPA). These all focus on authenticity, quality, and consistency. Without the original IP, how can any company other than the OSM accurately and confidently guarantee the authenticity of a device? OEMs and distributors need to rely on OSMs exclusively for this function.

Combining this level of verification, testing, and inspection with a 100% authorized distributor supply chain should solve the problem, right? Apparently not. Customers still buy from questionable sources today. Why? Without proof of direct lineage to the OSM, why would customers, especially small and mid-size OEMs take the risk, when sketchy products ought to be viewed as poison?

One procurement strategy that helps customers achieve this superior level of buying power is something that we call the Constant Initiative. Within the Constant Initiative, OSMs always support and only sell their products through authorized distributors, and don't take key accounts and growth accounts away on a direct basis.

This immediately resolves one problem area: where OEMs will get their products -- only from authorized distributors with 100% certified products from the OSM. This also means that a customer can return the product back through the authorized distributor, and the distributor can return the product to the OSM.

This is the only way to maintain 100% control of products throughout the supply chain while maintaining trust and traceability and preserving direct lineage back to the OSM. This will also establish confidence at the OEM level that we as manufacturers will not pull business away from the distributor. In this way we preserve the OEM/distributor relationship, which creates a constant that the supply chain desperately needs.

Let's talk about this and other best practices in keeping counterfeits out of the semiconductor supply chain.