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54 SMT Magazine • October 2014 by todd Kramer SECurE COMpOnEnTS LLC Kramer On cOunterFeits COLuMn counterfeit electronic Parts avoidance: Profitability or catastrophe introduction The number of transistors in a dense inte- grated circuit doubles about every 18 months. Consequently, the critical technology that the Department of Defense (DoD) uses becomes obsolete around every two years, while many of their weapons systems will remain in use for more than two decades. As a result, there is a critical need to source obsolete or rare parts which are no longer sold via the authorized channel or produced by the original contract manufacturer. The potential for counterfeit parts infiltra- tion into the defense supply chain is a real and present danger. Cost Accounting Standards (CAS)-bound contractors and subcontractors are required to have an avoidance and detec- tion system in place to quarantine and report suspected counterfeit and obsolete electronic parts. In some cases, those without counterfeit avoidance strategies can be fined, jailed and even put out of business. But that's just the tip of the iceberg. Sweep- ing changes in the way your business must handle the counterfeit parts threat are here and will soon affect every sector of the world-wide electronics market: government, commercial and consumer. Whether you survive and profit or fail and perish will largely depend on the de- cisions your business makes today to adapt to these new developments. a cautionary tale John Doe, owner of XYZ Company, a New Jersey-based independent contract manufactur- er, zipped his new Porsche 911 Turbo along I-95 over the George Washington Bridge and into New York City. He was on his way to an impor- tant celebration: His firm had just won a $35 million bid to supply electronic components to a prime DoD contractor, with the guarantee of larger deals in the future. A lavish dinner had been planned honoring XYZ's seventh year of business—and 28 quar-

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