Issue link: https://iconnect007.uberflip.com/i/1527276
28 SMT007 MAGAZINE I OCTOBER 2024 Essentially, you're tracking the ethical and non-ethical behavior of suppliers. How did this start? Our founder and president, Mark Snider, started a company in the early 1990s as an inde- pendent distribution broker. He was appalled by the number of bad actors. It was completely unregulated with quite a bit of financial fraud. For example, you would get an order and ship the parts COD. ey would write a check, and the UPS guy would deliver the box. You'd get the check back from UPS in 10 days and 10 days aer that, you'd find out the check had bounced. So, Mark faxed everyone he knew in the industry. He said, "I'm going to stop selling to this guy. I got a stack of bad checks from him." Lo and behold, he got replies of, "He got us too." Mark started keeping track of that infor- mation and started this organization with the support of companies he had communicated with. He kept track of incidents and trends and sent that out weekly. By 2000, he had a web- site, and we started getting reports of counter- feit material. That was a bold move. What a service to the industry! Mark is a true believer. His son is a recently retired F-15 pilot, and his son-in-law is cur- rently an active Navy diver. Mark was con- cerned about counterfeit material getting into defense products. For years, he was waving the flag at the Department of Defense, which really didn't catch on until about 2005. Now, virtu- ally every defense contractor has some sort of counterfeit risk mitigation program in place. I'm surprised to hear that the first counterfeit example of integrated circuits didn't show up until 2000. In the 1970s and '80s, counterfeiting involved a few unscrupulous distributors who would change the labels to substi- tute a less expensive manufac- turer's part for a higher-cost, more desirable manufactured part. at happened a lot with mechanical things like connec- tor pins. To my knowledge no one was reporting in the 1970s and '80s. We now have 24 years of collecting data on counterfeit parts. How has counterfeiting evolved since then? A great deal. One of the significant milestones for counterfeiting came when China joined the World Trade Organization (WTO). At that time, it became easy to import products from China. Now, China ships a lot of high-quality product, but once they could deal more simply with countries worldwide, it was a big opening for criminals—the counterfeiters. One reason counterfeiting became a big opportunity in China was the electronic scrap the U.S. sent for disposal. It gave the Chinese companies a lot of raw material to work with. ey would remove components from scrap PC boards, sandblast the numbers off, recoat them with some sort of blacktop material, and then mark them with whatever part number they were trying to sell you—with no regard for what the chip inside actually did. It looked like the correct part, but when you hooked it up, it didn't work. at was the basic, most common form of counterfeiting. We've also seen many lower-quality, less expensive manufacturers' products being switched for higher-quality, more expensive products. Extremely high-tolerance devices are being switched for low-tolerance devices. ey make a lot of profit that way. Lately, the Department of Defense and other areas have been concerned about cloned prod- ucts, which are expensive products that have been reverse-engineered. e concern is bad state actors adding malicious code. ere have been many eyes looking out for that lately. Rick Smith