Editor's Note: This article originally appeared in the April 2012 issue of SMT Magazine.

In November 2011, the Senate Armed Services Committee identified China, among other countries, including the United States, as a major source of the counterfeit electronics making their way into U.S. military systems and other critical systems. The failure of counterfeit parts in these systems could be catastrophic and could even be responsible for the death of military or civilian personnel.

In a four-hour hearing before the Senate Armed Services Committee, witnesses testified about the sources of counterfeit electronic parts, how they are made, cases where counterfeit electronic parts have penetrated the defense supply chain, and the cost of counterfeit electronic parts and their potential impact on defense systems. Listening to the questioning and testimony, anyone who worked in the defense electronics industry in the pre-COTS era could not help but wonder what happened to the robust quality assurance, supply chain management, and part traceability systems that were mandated by government design specifications and quality management programs of that time. Yes, “old timers” acknowledge that these systems were costly, but post-COTS parts procurement practices often result in even more costly correction and remediation for each incident of counterfeit components that have found their way into military systems of late.

Senator John McCain, Chairman of the Armed Services Committee, asserted that, with respect to electronic parts counterfeiting, “The Chinese government can stop it.” However, Senator McCain fails to recognize (or is reluctant to acknowledge) that the root cause of the problem is not the Chinese. The team at the Center for Advanced Life Cycle Engineering (CALCE) at the University of Maryland is routinely asked to investigate counterfeit electronics. CALCE has found that the responsibility for counterfeiting most often lies with unauthorized U.S. suppliers (distributors and other mid-tier suppliers), as well as the system manufacturers who fail to vet their suppliers and ascertain the pedigrees of the parts that they procure. These mid-tier suppliers often commission the counterfeiting of parts from businesses in foreign countries, including Vietnam, the Philippines, China, and Thailand. In other words, U.S. military contractors who knowingly or unknowingly procure counterfeit parts from unauthorized U.S. parts distributors (brokers) who commission the counterfeiting of these parts specifically to sell to military contractors are the root cause of counterfeiting.

In essence, evolving market forces have created the demand for counterfeit parts for military systems. And, when a market develops, suppliers will rise to serve that market. The military market, with its demand for obsolete parts, the cost and schedule pressures it places on manufactures, and the overall degradation of its supply chain management and supplier controls, is the true cause of its own undoing. Add to this mix the offshoring of scrapped electronics to China’s parts reclamation mills rather than responsible domestic recycling, and the supply source of obsolete electronics components is created in China.