Print 29 comment(s) - last by poi2.. on May 23 at 9:48 PM

Counterfeit electronics and military hardware risks American lives

It would be reasonable to expect the United States military contractors building the aircraft our military uses to defend the nation to be absolutely sure electronics they use in the aircraft are legitimate and don't suffer from any security issues. However, a Senate report indicates that this not always the case. The Senate Armed Services Committee issued a report documenting the year-long investigation launched by Democratic Chairman Carl Levin and ranking Republican John McCain into counterfeit Chinese electronics in military aircraft.
The report spans 112 pages shows that 1,800 cases of bogus counterfeit parts were discovered during the investigation. The counterfeit Chinese parts were discovered in the Air Force's largest cargo plane, helicopters used by special ops soldiers, and Navy surveillance aircraft. 
Levin said, "[The report] outlines how this flood of counterfeit parts, overwhelmingly from China, threatens national security, the safety of our troops and American jobs."
“It underscores China’s failure to police the blatant market in counterfeit parts — a failure China should rectify,” he continued.
The Senate report also notes that the Chinese government wouldn't issue visas to Senate committee staff that wanted to travel to Asia as part of the investigation. Defense News reports that one Chinese embassy official said the issue was sensitive and a negative report could damage relations between the United States and China.
While the source of the counterfeit electronics was overwhelmingly determined to be China, the report does say that contractors and other authorities in the United States are partly to blame for failing to detect fake parts and routinely failing to report suspected counterfeit goods.
Among the fake and counterfeit parts the investigation discovered were Electromagnetic Interference Filters that were used in night missions and in the operation of military arms such as the Hellfire missile used on certain Navy helicopters. Counterfeit memory chips were also found in the display systems used by the C-17 Globemaster III and the C-130J military cargo aircraft. Additional counterfeit parts were discovered in refurbished ice detection modules on the Navy P-8A Poseidon used for anti-submarine and anti-surface warfare by the Navy.
The SAS first mentioned the problem of counterfeit electronics and military hardware last year.

Source: Defense News

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By Flunk on 5/23/2012 9:45:14 AM , Rating: 5
That's the problem with outsourcing, you never know what you're going to get.

RE: Outsourcing
By kleinma on 5/23/2012 10:05:43 AM , Rating: 3
The report seems to go to great lengths to blame china, but what contractor is actually the one ordering these parts? Do they think they are getting legit parts, or are they cutting corners to win military bidding contracts?

RE: Outsourcing
By theapparition on 5/23/2012 12:03:57 PM , Rating: 5
I can explain the situation.

Counterfeit parts fall into a few categories. Used parts, with not history or traceability. Remarked parts, where a slightly different part is remarked to conform, or actual counterfeit parts, where some parts have been made to have extra circuitry to "phone home".

Used parts are seen the most. There are entire cities in China where the industry is buying scrap electronics, and removing all the circuitry to resell. Used parts present many problems since MTBF is based on new parts, so they can fail prematurely or not be as reliable as the new part. Plus without lot traceability, you have no way to track the failures across multiple builds.

Remarked parts are also common, but more dangerous as the internal circuitry isn't exactly the same, so functional issues can arise.

The most sinister, although very rare are the chips that are actually targeted espionage. Spies obtain the parts list for sensitive equipment and reverse engineer actual parts, plus add some extras for espionage.

But to answer your question, the contractors aren't buying these chips to cut corners. They absolutely believe they are buying legitimate parts. So how does this happen?

Most of the time I've seen this, the contractor is dealing with obsolete part issues. With significantly longer design cycles and much longer field life than consumer electronics, it's not uncommon to see ICs go obsolete during a products production. It then becomes a question of finding the parts from alternative sources rather than the mfr, or spending tons of money to redesign the product, and then spending likely 10X that re-qualifying it. Government agents usually authorize buying from distribution and as a last resort.....brokers. Legitimate brokers buy excess inventory from many companies and then sell it at inflated rates.

They are an option you only want to use under the worst circumstances. The problem is, there can be illegitimate brokers, so you have to vet them to make sure you a buying the right parts, and get Certificates of Conformance with them, lot numbers, etc. But sometimes the CofCs get faked, and bad parts get into the legitimate supply chain (eg Badcompany1 buys 1000 of part X. Swaps them out for fake part X and keeps the legitimate CofCs. Sells them with the CofCs to Goodcompany2. Goodcompany2 sells them to Mil contractor with no idea they are bad parts. Badcompany1 shuts down, and reopens as another company and all history is lost.

My company was actually on the other end, where one of our mil customers, to avoid all counterfeit issues, shut down all suppliers except for a few large established ones. It was a pain in the but to get back on their approved vendor list, even though my company doesn't provide any physical products. The mil contractors are taking this very seriously.

RE: Outsourcing
By BurnItDwn on 5/23/2012 2:12:39 PM , Rating: 3
Interesting, thanks for sharing!

RE: Outsourcing
By vortmax2 on 5/23/2012 2:56:04 PM , Rating: 3
This post should be a "6".

RE: Outsourcing
By mars2k on 5/23/2012 10:16:02 AM , Rating: 1
Look at the larger picture, China emerging as a source for sophisticated electronic parts. You have to admit this is a few steps above selling bootlegged DVDs.

RE: Outsourcing
By bah12 on 5/23/2012 11:28:52 AM , Rating: 2
So what your saying forest is outsourcing is like a box of chocolate? Sure sometimes you get caramel goodness, but the knockoff Chinese chocolates would be the ones filled with toothpaste.

RE: Outsourcing
By poi2 on 5/23/2012 9:48:12 PM , Rating: 2
These happens when
"Well, as long as its flies and cheap-o."
"Ok bos, your wish is my command.
It will be cheap and flies."

"The Devil is in the details."

I bet the buyer forgets to put
"Have to be made from new components."

You don't do that with the Chinese

Not New, Not Surprising
By skyflier on 5/23/2012 11:12:57 AM , Rating: 2
One of the main counterfeiting I have seen the government get bit on is Cisco counterfeits. Those bad boys are expensive, but Cisco has their devices made in China. So, naturally the designs were stolen, and thus the counterfeiting. This has been a problem for years. We just blindly trust Chinese manufactures to not counterfeit. I could go on ranting, but i will stop.

RE: Not New, Not Surprising
By lightfoot on 5/23/2012 11:27:59 AM , Rating: 2
We just blindly trust Chinese manufactures to not counterfeit.

No. Nobody trusts the Chinese not to counterfeit. The problem is that if you wish to sell your product in China, their government generally requires the product to be manufactured there or it will be hit with punitive import taxes.

RE: Not New, Not Surprising
By mars2k on 5/23/2012 11:32:07 AM , Rating: 2
All with the collusion of our own Government. We have made the devil’s bargain with China. We pretend to want free trade but expect none in return. We’ve borrowed to buy their shoddy goods and finance our deficits. We ship our jobs back in return.

Americans have been sold a bill of goods. Please tell me how its to our economic advantage to buy something made in China and pay to ship it half way around the world for consumption. How are their robots cheaper to run than ours?

RE: Not New, Not Surprising
By fic2 on 5/23/2012 11:54:20 AM , Rating: 2
I have said for years that we should treat countries as they treat us. Your country is going to force our companies to do X to be able to do business in your country so we need to force their companies to do X to be able to do business in our country.

RE: Not New, Not Surprising
By lagomorpha on 5/23/2012 12:36:10 PM , Rating: 5
Tit-for-tat foreign policy? I like it - you put tariffs on out goods, we put them on yours. No freedom of religion in Saudi Arabia - no Saudi money allowed to finance mosques here.

RE: Not New, Not Surprising
By gamerk2 on 5/23/12, Rating: -1
RE: Not New, Not Surprising
By name99 on 5/23/12, Rating: -1
Not off the shelf components
By bupkus on 5/23/2012 10:18:37 AM , Rating: 2
Since these parts are probably not generic to any consumer or commercial applications it makes me curious how the Chinese got the specifications to build them. It would seem this alone represents a significant security breach.

Then there is a potentially embarrassing question-- did these parts work better than those actually produced by so called legitimate subcontractors or our own defense industries?

RE: Not off the shelf components
By mars2k on 5/23/2012 10:24:16 AM , Rating: 2
Great point. These aren't just cheap cooking utensiles from Walmart. Meanwhile they get better at it.

I wouldn't think higher quality would be the question. Remember the poison pet food fiasco?

RE: Not off the shelf components
By FaaR on 5/23/2012 11:35:01 AM , Rating: 2
RF filters and display controllers aren't exactly James Bond secret agent level technology... Probably not ice detectors either. Almost all electronic components that go into military hardware also have uses in civilian tech somewhere.

RE: Not off the shelf components
By gamerk2 on 5/23/12, Rating: 0
RE: Not off the shelf components
By MrTeal on 5/23/2012 11:49:31 AM , Rating: 2
Things that are specialized are built from other less-specialized components, which are in turn built from pretty generic components. If the defense contractor builds a plane that uses some motor controller from Sub A, Sub A might design and build it using certain transistors. Sub A buys transistors from Manufacturer B and gets them from Distributor C. Distributor C gets them from B's factory in China, but the Chinese factory sends distributor C counterfeits and pockets the real transistors for resale. Up through the chain they go, until the plane is built with counterfeit transistors. Sometimes they fail immediately, bu sometimes they survive just long enough to be put in service and take out other equipment when they do fail.
It's not always so easy to tell the difference.

By lightfoot on 5/23/2012 11:21:49 AM , Rating: 5
“It underscores China’s failure to police the blatant market in counterfeit parts — a failure China should rectify,” he continued.

The U.S. has a national security problem, and we think China should fix it? That would be funny if it wasn't so pathetic.

Back in the old days if the U.S. had a problem, the U.S. would fix it.

RE: Funny
By TSS on 5/23/2012 4:27:36 PM , Rating: 2
That's assuming the chinese aren't aware of this at all.

It's certainly not going to be bad for China if your jets can't fly properly. I'm not saying they're actively selling counterfit parts, but i am saying they could very well be actively not-stopping counterfit parts from hitting the market.

It's not like you can do anything about it either. The only option you'd have is tariffs on chinese parts, but then some americans will complain it costs more. AKA the recent solar panel tariffs (IMO if there ever was a starting shot for a trade war, that was it) where US companies basing their model on cheap chinese panels said they would incur an extra 10% costs which they couldn't afford. Didn't even take a week for that article to arrive following the announcement.

I'm just saying where not exactly headed for times where you could expect any nation to look out for another.

Sounds like...
By AskTheChief on 5/23/2012 10:27:40 AM , Rating: 2
Sounds like an episode of Hogan's Heroes, where the prisoners built a bridge for the Germans, but built in a bomb and blew the bridge up after it was complete.

By Stuka on 5/23/2012 11:20:59 AM , Rating: 2
There really should be an all-out legislated ban on ANY outsourcing for ANY government contract. At the very least, no outsourcing to the single largest source of counterfeit products on the planet.

RE: Frustrating
By gamerk2 on 5/23/12, Rating: 0
what really worries me...
By chµck on 5/23/2012 2:19:02 PM , Rating: 2
this is what really worries me:
A capacitor that the user assumed to be rated up to 50V, but is actually on rated up to 35V. Best scenario: a tv breaks. Worst scenario: Bomber delivering a nuke to china fails and drops the load over china without being armed.

They missed the real problem
By Florinator on 5/23/2012 3:02:34 PM , Rating: 2
Somehow I have the feeling that the real threat to national security is the fact that we don't have the manufacturing capabilities for any of these parts over here...

The Cylons Are Coming ...
By ZorkZork on 5/23/2012 3:27:35 PM , Rating: 2
... sooner or later some of this stuff will come with added features courtesy of the Chinese military.

soft power
By anandtech02148 on 5/23/2012 5:28:04 PM , Rating: 2
Why can't we talk about the prostitutes from Cartagena, Columbia. Thats more exciting then what the Chinese are doing. What the Chinese are doing is a suprise for the later stage of the war with America, When america acts tough, talk tough but fall on their feet to an advancing million man army that China sent, like they already did in Korea. No amount of hightech weapon is going to save you.

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