A Cautionary Tale: Counterfeit Materials
We now live in a world where we take certain things for granted. The car, for instance. Without the car, life would be entirely different. But in the days when the motor car was in its infancy, those in authority decided that some care was required. Thus it was, in 1865, that the British Government of the time introduced the Locomotive Act, which was also known as the "Red Flag Act”. This required all road locomotives, which included automobiles, to travel at a maximum of 4 mph (6.4 km/h) in the country and 2 mph (3.2 km/h) in the city, as well as requiring a man carrying a red flag to walk in front of road vehicles hauling multiple wagons.
In Philadelphia, USA, there was legislation that instructed the driver of the horseless carriage, upon meeting a drove of animals on the same road, to stop the vehicle, and disassemble it into its component parts, which needed to be hidden in case the livestock became alarmed. The vehicle could only be reassembled once the herd has passed by calmly.
Obviously, a risk assessment had been carried out, and doubtless the person in charge of the horseless carriage would be driving not only very slowly, but with due diligence as well, and equipped with a sizeable tool box.
Another "red flag" would now seem to be necessary, relating to another vehicle - the printed circuit board. This is something else that we might all have taken for granted, but all is not as it seems. The trend towards counterfeiting has spread down to the basics.
The counterfeiting of components is, of course, well-known; articles have been written that show that the proliferation of counterfeit electronic parts into the manufacturing supply chain costs the United States government and its contractors billions each year.
But the problem is not just limited to those who supply government agencies. Recent reports show consumer and industrial businesses are losing approximately $250 billion each year because of counterfeit components.
One report notes the automotive industry alone lost $3 billion in sales, while another shows the semiconductor industry takes a $75 billion annual hit. In addition, these counterfeit parts frequently create the potential for product malfunction, leading to personal injury and even death—a situation that has created unnecessary danger for military and everyday consumers, plus immense new levels of liability and risk for manufacturers in a wide range of industries.
The printed circuit board might seem an innocent victim to such fraudulent activity. After all, it’s only some resin mixed with fibres and pressed flat with some copper foil laminated to the surface on both sides. Isn’t it? No, it is not. It is a sophisticated medium, and might quite aptly be called precision engineering, which does not come cheap. Circuit board manufacturers are well aware of the huge range of copper-clad laminate that is available to them.
There is a laminate for various applications, determined by the customer, where the requirements could be for halogen free, for high density interconnect, for high speed digital, for high thermal conductivity and/or reliability; some might have to be lead free compatible, or have a low CTE in the z-axis. End-use could be in the automotive field, as backplanes, for RF/Microwave applications, for high end computing, in areas where signal integrity is vital, and in the critically important worlds of medicine, the military, aerospace, as well as for mobile devices, servers, and wireless infrastructure.
This is carefully considered world of laminate selection by performance, and the complexity of manufacturing such materials cannot be underestimated nor overvalued.
Consider then the recently reported situation facing an OEM company. They have sourced a prototype, and have specified the type of laminate required. The prototype is duly delivered, complete with Certificate of Conformity (COC). The prototype is tested for such compliance, and it is discovered that the laminate used to produce the panel bears little or no relationship to the material specified. The COC turns out to be forgery, the laminate used turns out to have been sourced from the recycling bins of a PCB manufacturer in the country of origin.
In the early days of circuit board manufacture in the UK, one of the leading suppliers founded a profitable business based on collecting scrap and off-cut laminate from waste containers and repackaging into popular sizes and quantities. The prices were attractive, availability was assured, and little or no technical support was expected. If the laminate was flat enough, well and good, and a modicum of bow and twist was manageable. The application of Brasso hid many a defect.
A quarter of a century later and things have changed. Prices for laminate have changed, and so too the expectations; but this cautionary tale is written to spread the word that all may not be as it seems, and some very overdue diligence seems to be needed.
Let us have a look at imaginary but all-too-possible scenarios:
European OEM orders pre-production quantities of thermally-managed PCBs for automotive LED lighting from accredited European fabricator on specified IMS material. PCBs are made to specification, delivered with certificate of conformity and meet all the design requirements.
OEM orders production quantities from Chinese supplier, to same specification as pre-production units. PCBs are delivered with COC, superficially OK but begin to fail in service. OEM asks nominated laminate supplier if the particular specified grade of material he supplies to Chinese customers has the same properties as that supplied to European customers. Laminate supplier answers in the affirmative.
So what went wrong?
Chinese PCB fabricator buys one panel of the material specified on OEM drawing, from the nominated, fully-accredited, laminate manufacturer, and is supplied with a genuine COC. Chinese PCB fabricator then buys production quantities of lower-price, lower-performance material from a non-accredited laminate manufacturer, fabricates and delivers the OEM order, accompanied by a subtly “modified” copy of the genuine certificate of conformity.
Three consequences: OEM is supplied with inferior and potentially unreliable PCBs. Chinese PCB fabricator increases his profit margin. Accredited laminate manufacturer stands to lose his good name and reputation.
Major North American aircraft OEM asks nominated manufacturer of specified polyimide laminate what his supply-chain route to major North American PCB fabricator supplying PCBs to the OEM is. Laminate manufacturer supplies through third-party distributor. OEM insists that his PCB supplier buys specified laminate direct from the nominated manufacturer.
Whether as a result of historical bad experience, or simply being cautious, the OEM is very concerned to avoid the consequences of counterfeit materials entering the supply chain for safety-critical applications. And laminate manufacturer cannot afford to risk his good name and reputation.
Within the EU the first importer of the product is considered the “manufacturer” for liability purposes, so in the event of a claim arising from a failure due counterfeiting, the PCB broker will be left carrying the financial liability. Brokers tend to be at the small end of the SME group, with limited assets and quite unable to sustain any significant financial claims that could arise from this scenario. Recovering any losses in China can be very difficult if not impossible.
Supply chain integrity should be as much as part of supply chain quality management as any other virtue.
Material traceability is a headache at the best of times, as one sheet of laminate looks much like another when covered in copper foil, and this enigma is multiplied when the supply chain becomes more complicated with distributors and sub distributors and agents, some of who supply similar materials from several different manufacturers. This is a common situation throughout Europe.
In conclusion, this is a look at the management of risk. Risk comes wearing many hats – there is reputational risk, which can be damaging; there is inherent safety risk, which could be fatal, and there is financial risk to the OEM, the PCB manufacturer, and the PCB broker. One way of minimising risk is by dealing direct.
Perhaps, back in 1865, they concluded that less speed meant more safety. Maybe 150 years later we should encourage greater safety by combining less haste with more diligence, and on a straighter road.