Committee's Investigation into Counterfeit Electronic Parts in The Department of Defense Supply Chain, Hearing Before The Committee on Armed Services, United States Senate One Hundred Twelfth Congress, First Session, November 8, 2011 [open pdf - 12MB]
From the opening statement of Carl Levin: "The systems that we rely on for national security and the protection of our military men and women depend on the performance and reliability of small, highly sophisticated electronic components. Our fighter pilots rely on night vision systems enabled by transistors the size of paper clips to identify targets. Our troops depend on radios and Global Positioning Systems (GPS) devices and the microelectronics that make them work to stay in contact with their units and to get advance warning of threats that may be just around the next corner. The failure of a single electronic part could leave a soldier, sailor, airman, or marine vulnerable at the worst possible time. A flood of counterfeit electronic parts has made it a lot harder to have confidence that will not happen. In some industries, the term ''counterfeit' suggests an unauthorized fake, a knock-off of an original product. The definition of 'counterfeit' as it relates to electronic parts, which has been endorsed by DOD and defense contractors alike, includes both fakes and previously used parts that are made to look new and are sold as new. In March of this year, we announced an Armed Services Committee investigation into counterfeit parts in the DOD supply chain. During the course of the committee's investigation, virtually every one of the dozens of people our investigators have spoken with, from defense contractors to semiconductor manufacturers, to electronic component brokers--every one of them has pointed to China, specifically the City of Shenzhen in Guangdong Province as the primary source of counterfeit electronic parts. While this hearing is focused mainly on the national security implications of counterfeit electronic parts, the rampant theft of U.S. Intellectual Property by Chinese counterfeiters also severely impacts our economic security. According to the Semiconductor Industry Association (SIA), U.S. semiconductor manufacturers employ nearly 200,000 American workers. Counterfeiting puts those jobs at risk and robs us of American jobs yet to be created. The SIA estimates that counterfeiting costs U.S. semiconductor manufacturers $7.5 billion a year in lost revenue and costs U.S. workers nearly 11,000 jobs." Statements, letters, and materials submitted for the record include those of the following: Thomas R. Sharpe, Richard J. Hillman accompanied by Timothy Persons, Brian C. Toohey, Patrick J. O'Reilly, Vivek Kamath, Ralph L. DeNino, and Charles Dabundo.
S. Hrg. 112-340; Senate Hearing 112-340
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