US-based semiconductor firms face more than $7.5 billion in counterfeiting costs each year. Despite this, Brian Toohey, President of the Semiconductor Industry Association (SIA), insisted that the financial cost should not be the biggest concern.
Testifying before a Senate committee, Mr. Toohey observed that counterfeit versions of semiconductors are well-known threats in the electronics supply chain, explaining that they put the health and safety of the military and civilians at risk. This, he suggested, is a much greater threat than that posed by the economic cost of such activities.
The President of the SIA claimed that counterfeit semiconductors are now often found in mission-critical applications. "The catastrophic-failure risk inherently found in counterfeit semiconductors places our citizens and military personnel in unreasonable peril," he said. "A counterfeit semiconductor is a ticking time bomb."
In relation to the economic impact of counterfeit parts on the electronics supply chain, Mr Toohey observed that counterfeiters violate US companies' intellectual-property rights. Additionally, he explained that counterfeiters cause US citizens to lose their jobs. "We estimate that counterfeiting costs US-based semiconductor companies more than $7.5 billion each year," he told the Senate committee.
To curtail the problem of counterfeiting, Mr Toohey recommended the government introduces a multipronged approach. First, he called on the government to support partnerships within industry to develop a more robust and effective authentication system. Then, Toohey said that the government should strengthen procurement procedures at the Department of Defense for mission-critical components. And finally, he urged the Obama administration to aggressively prosecute counterfeit traffickers.
On an international level, meanwhile, Mr Toohey observed that the problem of counterfeiting would be aided if the law enforced intellectual-property rights in a stronger way.
"Our industry takes this threat very seriously, and we are committed to doing everything within our power to work with the Department of Defense and other government agencies to stop counterfeits from entering the US and our military and civilian supply chains," Mr Toohey remarked.
Meanwhile, new research has found that global semiconductor sales will grow to $302 billion for 2011, hitting the $300 billion mark for the first time. The SIA said this represents a 1.3 percent rise on 2010.
Mr Toohey explained that the figures are especially impressive considering the challenging global economic environment this year and the impact of natural disasters in Asia.
"The growing level of semiconductor content embedded across a wide range of consumer, industrial, business and government applications points to continued growth in 2012 and 2013," he commented.