The remarking of DRAM chips, already a serious problem in South-East Asia, is getting worse, according to industry insiders.
Although not as widely publicised as the remarking of processor chips, DRAM remarking works on the same principle. Pirates pass off memory chips made in Taiwan or China as chips from established DRAM manufacturers, such as NEC, Toshiba, Fujitsu or Samsung. They do this by scraping off the original names on the chips, and then remarking the chips with the NEC or Samsung logo.
"This remarking takes place not only in Taiwan and China, but also in Hong Kong, Malaysia and Indonesia," said Ben Lee, market analyst, Semiconductor Group, for Dataquest Taiwan.
The countries with the most remarked chips are in South-East Asia, and the situation is worsening, Lee noted.
"It's very easy to remark a chip, and the problem will keep getting worse because in some countries there is no penalty for this kind of action," he said. "As long as there are profits in it for the pirates, this will keep happening.
"This is a major problem in Singapore," said Michael Tan of Convergent Systems, Kingston Memory's distributor. "A lot of foreign traders come to Singapore to buy DRAM. They are sold the DRAM at extremely good prices, but the chips are actually remarked."
Singapore end-users are also being sold remarked memory chips in places like Sim Lim Square and Funan Centre, Tan said.
"Big name brands like Compaq, Acer, and IPC are obviously not the problem, because they get their memory directly from the manufacturers," he noted. "It's the small stores that are the culprits."
"From what I have heard, the remarking of DRAM chips is a fairly serious problem in Singapore," agreed Bryan Ghows, vice-president of the BSA in Singapore. In general, end-users there are not aware that the memory they buy could be remarked, he added.
"This is a problem which is not known outside of the industry," he said. "However, if the problem becomes widespread, it would definitely cause a lack of confidence amongst purchasers of PCs and systems, because they would not be able to buy with confidence products which are genuine on the surface.
One factor aiding DRAM remarking is that detection is difficult. Short of running the chips through a DRAM testing machine, it is almost impossible for end-users to know if their chips are counterfeits.
"Even when you use a remarked chip, performance is generally still very stable," said Dataquest's Lee. "It is only when the chip is defective, or when the chip has been remarked from a lower to a higher speed, and then the user upgrades to something like Windows NT, that his system will be affected."
The problem, however, is that remarked DRAM tends to be of a lower quality than chips from established manufacturers. For example, one important characteristic for memory chips is stability of speed.
A Samsung DRAM chip typically operates at 45ns, and this speed is maintained no matter how much or how often the chip gets heated up. On the other hand, a remarked chip, which might operate at a slower 55ns, will drop its speed to 60ns and even lower, as it gets hotter.
"There is a qualitative difference between remarked and original chips," Tan said. "If the user upgrades to a more demanding system, such as Windows NT, he'll start experiencing crashes, or he might lose data. He could even corrupt his hard disk."
One end-user who had problems with his PC is Christopher Choo.
Choo bought a Pentium machine from Sim Lim Square for $S3,000 ($A3,000) and started encountering problems almost immediately. Programs crashed, he started getting general protection faults, and his Windows program sometimes could not be run.
"The PC was also incredibly slow," he said. "People told me how fast Pentiums were, but I thought, gosh, I can write faster than this."
When Choo and his friends investigated, they found that his system had a low-quality remarked memory chip, as well as a processor chip marked up from 100 to 120MHz.
"I found out I was sold a lot of junk," he said. "I'm not a techie like my friends, so I guess it's people like me who get scalped."
The main victims of memory remarking are home users, who form the bulk of the customers at small OEM shops. However, business users can also be affected.
"It really depends on what sort of system you have," Dataquest's Lee said. "If you are using a basic system, then a remarked chip would still be okay. However, if you are using higher-end systems such as servers, then you could have many problems."
Although detection is difficult, there are instances where remarking has been discovered. For example, in April 1995, US-based Kingston Technology took action against a local second-tier DRAM reseller for selling single in-line memory modules (SIMMs) containing memory chips remarked as Kingston chips.
Since that incident, Convergent Systems has been monitoring the market to ensure that no further fake Kingston chips surface, officials said.
In August last year, NEC issued press releases warning the public that fake chips were being sold in the United States and South-East Asia under the NEC logo. In that instance, the counterfeit chips were marked with the NEC brand in erasable ink, whereas standard NEC DRAM is marked with laser.
Another factor aiding DRAM remarkers is that there is no monitoring authority. Cooperative anti-piracy organisations such as the BSA and the Software Publishers Association keep tabs only on software.
"If you want to buy any memory product, it's obviously better to buy a reputable brand," said John Dutton, managing director for DRAM distributor Australasian Memory in Singapore. But this won't always guarantee you peace of mind. Merv Smythe of Norse Technology, Australia, agrees that there is a problem with remarked DRAMS, and says the issue is rife in Australia too. "I've got samples in my office of SIMMS that were rebatched. They were sold to the Government, which used its brains and marked the chips. But it sold them because they obviously weren't working properly." So, though Smythe agrees that it's the small businesses one needs to be wary of, even major players who only buy from big distributors are getting caught. "It's a real problem. We're finding a lot of rebatched chips among the trade-ins we've been getting. I was shocked - we've been getting some real beauts," said Smythe.
According to Smythe, "The only way to stop rebatching is to get the big guys who make the chips, like Toshiba and NEC, to destroy bad chips instead of selling them to the toy industry for lower-grade products. Then we wouldn't get so-called toy grade coming back as good grade. We mustn't blame the little guys, the smart-arse crooks, but the big guys for not scrapping the chips."
Besides fake DRAM chips, there are also other more pressing problems that end-users face when buying memory, Dutton said. "I don't see the counterfeiting as being a major issue," he said. "The quality and reliability of the chip, the fact that there are a lot of parity generators used which are an artificial way of convincing the machine that it's doing a parity check when it's not, these are the real problems that users face, rather than counterfeiting."
Smythe also pinpointed a new area in the Australian marketplace that is opening itself up to remarking. EDO RAM chips look identical to ordinary chips, but give a higher throughput and are marked with different product numbers, said Smythe. "Rebatching is going on there, too, and that one's hard to detect, because the performance difference between the two chips is five per cent. It's difficult for most users to know whether they're getting the extra five per cent," he told ARN. "But this is a new thing; it's not widespread yet."