© 2011 Rochester Electronics, LLC

Page 4

September 2011

All Rights Reserved

 

Authorized distributors give you peace of mind –

unauthorized distributors can’t.

Most major semiconductor manufacturers do not have the resources to sell to the thousands of equipment

manufacturers who use their parts. To make sure their parts are available to their customers, they authorize – or

franchise – distributors to handle the sales. Franchise or license agreements protect end-customers because their

provisions guarantee product integrity and traceability:

•

Authorized distributors provide certificates of conformance and traceability documentation.

•

Authorized distributors maintain the original manufacturer’s warranty.

•

Authorized distributors enforce proper storage, handling, and shipping facilities and procedures.

•

Authorized distributors provide failure analysis capabilities and can handle corrective actions.

In addition, most original manufacturers audit their authorized distributors on a regular basis to ensure that high

standards are maintained and high product quality is assured.

Because unauthorized sources do not have franchise agreements with original manufacturers, they cannot

guarantee traceability or credibly offer the original warranty; they are not required to prove that they provide

proper handling, storage, shipping; and they are not required to provide test capabilities. Many unauthorized

distributors and brokers do not maintain inventory; they simply “source” components on an as-needed basis from

other unauthorized sellers. Procurement specialists who buy from unauthorized sources are at high risk for

obtaining counterfeit and substandard semiconductors.

The negative impacts of counterfeit and substandard parts are far-reaching

and compounding.

In the early days of semiconductor manufacturing, most components were slated for military application. The

parts were expensive because they were complex; they had to meet qualifications that would ensure they would

work at high speeds in high-stress conditions such as extreme temperatures and intense vibration. Counterfeiters

began making profits by producing substandard parts and selling them under false pretenses. When these parts

began to have a negative impact in the field, methods for proving authenticity were introduced into the supply

chain in the form of independent qualifications and audits, regulated certificates of conformance, and other

traceability paperwork. As the authentication procedures became more sophisticated, however, the counterfeiters

easily shifted gears and learned how to dodge the obstacles. For example, counterfeiters who are remarking a

component first sand off the original marking. Then they have to resurface the component (it’s called

“blacktopping”). As blacktopping inconsistencies began to raise red flags during inspection, counterfeiters become

progressively clever at creating blacktopping that looked totally legitimate. Sometimes the blacktopping obliterates

shallow surface indents that are part of the manufacturing process – another dead give-away that the parts aren’t

legitimate. So the counterfeiters just learned to approximate the original look of the indents. As their expertise

improved, counterfeiters expanded their markets to produce semiconductor parts for other industries.

There is a wide variance in the levels of dysfunction of counterfeit and substandard parts. Some parts simply do

not function at all. In these cases, the parts can immediately be replaced before they are put into production. The

financial losses may be substantial, but are limited to the price paid for the components coupled with production

downtime while new parts are procured. Original manufacturers, of course, do not honor warranties on

components purchased through unauthorized distributors. In other cases, however, parts appear to be totally