Hardware hacker extraordinare Bunnie Huang explains why the new defense bill, which makes it a crime to sell a "counterfeit" chip to the US military, is going to place an impossible burden on retailers, importers, and suppliers:
To better understand the magnitude of the counterfeiting problem, it's helpful to know how fakes are made. The fakes I've seen fall into the following broad categories:
1) Trivial external mimicry. Typically these are empty plastic packages with authentic-looking topmarks, or remarked parts that share only physical traits with the authentic parts (for example, a TTL logic chip in an SO-20 case remarked as an expensive microcontroller that uses the same SO-20 case). I consider this technique trivial because it is so easy to detect during factory test; in the worst case you are sold a thin mixture of authentic and conterfeit parts so that testing just one part out of a tube or reel isn't good enough. However, in all cases the problem is discovered before the product ships so long as the product overall is thoroughly tested.
2) Refurbished parts. These are authentic parts recovered from e-waste that have been desoldered and reprocessed to appear as new. These are very difficult to spot since the chip is in fact authentic, and a skilled refurbisher can create stunningly authentic-looking results that can only be discriminated with the use of electronic micsoscopes and elemental/isotopic analysis. I also include in this category parts that are new only the sense they have never been soldered onto a board, but were stored improperly (for example, in a humid environment) and should be scrapped, but were subsequently reconditioned and sold like new.
3) Rebinned parts. These are parts that were authentic, and perhaps have never been used (so can be classified as "new"), but have their markings changed to reflect a higher specification of an identical function. A classic example is grinding and remarking CPUs with a higher speed grade, or more trivially parts that contain lead marked as RoHS-compliant. However, it can get as sophisticated as vendors reverse engineering and reprogramming the fuse codes inside the chip so that the chip's electronic records match the faked markings on top; or vendors have been known to do deep hacks on Flash drive firmware so that a small memory can appear to a host OS as a much larger memory, going so far as to "loop" memory so that writes beyond the capacity of the device appear to succeed.
4) Ghost-shift parts. These are parts that are created on the exact same fabrication facility as authentic parts, but run by employees without authorization of the manufacturer and never logged on the books. Often times they are assigned a lot code identical to a legitimate run, but certain testing steps are skipped. These fakes can be extremely hard to detect. It's like an employee in a mint striking extra coins after-hours.
5) Factory scrap. Factory rejects and pilot runs can be recovered from the scrap heap for a small bribe, and given authentic markings and resold as new. In order to avoid detection, workers often replace the salvaged scrap with physically identical dummy packages, thus foiling attempts to audit the scrap trail.
6) Second-sourcing gone bad. Second-sourcing is a standard industry practice where competitors create pin-compatible replacements for popular products in order to create price competition and strengthen the supply chain against events like natural disasters. The practice goes bad when inferior parts are re-marked with the logos of premium brands. High-value but functionally simple discrete analog chips such as power regulators are particularly vulnerable to this problem. Premium US brands can command a 10x markup over Asian brands, as "drop-in replacement" Asian-brand parts are notorious for spotty quality, cut corners and poor parametric performance. However, there is a lot of money to be made buying blanks from the second source fab and remarking them with authentic-looking top marks of premium US brands. In some cases there are no inexpensive or fast tests to detect these fakes, short of decapsulating the chip and comparing mask patterns and cross-sections.