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84 SMT007 MAGAZINE I JANUARY 2022 at imbalance is a significant driver of the current global chip bottleneck. Although material and device shortfalls are common in the semiconductor industry, COV- ID-19 precipitated a global component crunch. An unseasonal spike in demand for consum- er electronics and a temporary collapse in au- tomobile interest worldwide in 2020 threw off typical production schedules. While vehicle demand returned late last year, manufacturers lacked the production capacity to address both market segments. Over time, the supply-demand imbalance spiraled into a multisector chip shortage, which industry experts believe will persist into 2023. How Do Shortages and Obsolescence Increase Counterfeit Risk? When components are not available in the marketplace, buyers are willing to pay more to acquire the parts they need. at makes these products prime targets for counterfeiters. ese bad actors attempt to capitalize on the unmet demand by creating fake products and selling them on the gray market. Consequently, increases in obsolescence and protracted shortages create a big opportu- nity for criminal operators. During periods of economic uncertainty, like the current moment, people worldwide face diminished or lost income. In desperation, some fabricate counterfeit chips to make up for their lost earnings. Because of their small size and lack of individual markings, micro- electronics are easier to fake than other com- modities. At the same time, manufacturers are hurt- ing financially because of skyrocketing oper- ating costs and widespread stockouts related to the global chip shortage. As a result, some firms have lowered their vendor qualification standards in hopes of acquiring badly needed parts. at poor judgment has unintentionally created more room for counterfeiters to oper- ate in the marketplace. How the Department of Defense Deals with Obsolescence and Shortages e U.S. Department of Defense considers obsolescence and shortages a major issue that requires a holistic solution. To that end, it cre- ated the Diminishing Manufacturing Sourc- es and Material Shortages (DMSMS) program to prevent those issues from hurting readiness, scheduling, and cost. e DoD defines DMSMS as the loss, or im- pending loss, of manufacturers or suppliers of items, raw materials, or soware. DMSMS- generated shortages in the ongoing produc- tion capability or lifecycle support of a weapon system or scarcity in any training, support, or test equipment already in the field, can endan- ger mission effectiveness. While DMSMS issues can be caused by many factors, their occurrence is inevitable. Accord- ingly, the DoD developed a series of policies, best practices, and strategies to engage with the problem actively. Its comprehensive frame- work includes valuable methods electronics companies can use to protect themselves from obsolescence and shortages. How Can I Avoid the Impact of Shortages and Obsolescence? Ensuring you have a solid obsolescence and shortage management plan is an excel- When components are not available in the marketplace, buyers are willing to pay more to acquire the parts they need. That makes these products prime targets for counterfeiters.

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