VIDEO:  http://www.youtube.com/watch?v=t8vsddxpwr8

WASHINGTON, D.C. - The US Semiconductor Industry testified before Congressman Michael McCaul's Oversight & Investigations Subcommittee hearing that a DHS policy established in 2008 has opened the floodgates to counterfeit microchips entering the US market.  The US military purchased 59,000 counterfeit microchips from China in 2010.  Chairman McCaul (R-TX) said the weakness in security raises concerns that military equipment could malfunction placing US troops in undue dangerous situations.  It also raises the concern that rogue nations could use counterfeit chips to help them hack into federal computer networks, possibly exposing sensitive information to espionage.

The Department of Homeland Security helps chip makers verify authenticity.  However, in 2008 DHS changed its policy and stopped sending companies photos with serial numbers and other identifying information which is necessary for a company to determine whether a product is authentic or counterfeit.  Brian Toohey, President of the Semiconductor Industry Association (SIA), testified it is now impossible to make this determination,  and easier for counterfeit chips to enter the marketplace.