The growing problem of counterfeit electronic components

7 August 2023

The counterfeit industry continues to thrive by adapting new methods to mask part authenticity of electronic components, and as counterfeit detection techniques improve, these illegal operators adapt their strategies.

Challenges of identifying counterfeit electronic components

Counterfeit components cost companies $billions each year due to increased labour costs, repairs or replacements, loss of reputation and other associated costs. The manufacture of counterfeit electric, electromechanical and electronic (EEE) parts isn’t a new problem, however, counterfeiting techniques are advancing and becoming more and more sophisticated. This means it's harder for manufacturers to accurately identify counterfeit parts in the supply chain.

What is a counterfeit electronic component?

A counterfeit part refers to an unapproved replica, imitation, substitution, or altered component that is deliberately misrepresented as a genuine product from an authorised manufacturer. A common method for counterfeiting electronic parts begins with the acquisition of legitimate discarded parts from piles of electronic waste. Another prevalent method of counterfeiting electronic parts involves parts being produced as blanks in a factory. In both cases these components are then illicitly marked, packaged, and sold, deceiving buyers into believing they are genuine products.

Most common counterfeited components and associated risks

Among the most frequently counterfeited components are integrated circuits (ICs), semiconductors, capacitors, resistors, transistors, connectors, and diodes. These counterfeit components can cause major issues, as their introduction into the supply chain can have devastating consequences. This is especially true of semiconductors, as they play a crucial role in the expanding array of mission-critical applications, including lifesaving medical devices, automotive safety systems and aircraft technology. However, if fake components manage to infiltrate defence contracts, the military's tools, systems, and communications equipment, they can present a serious threat to national security and operational integrity.

Counterfeit electronic components can present a serious cyber security threat

The use of nano technologies and the complexity of micro-electronics make it nearly impossible to detect whether a part of a chip has been compromised. One of the most critical concerns revolves around the possibility of "back-doors" in electronic hardware. Once these hidden access points are embedded in the hardware, identifying them becomes an extremely daunting task, particularly during the testing phase. The potential for such surreptitious modifications compromises the security and stability of the entire system.

Prevention is always the first line of defence

Counterfeit components are often difficult to identify by visual inspection alone, so when it comes to protecting your business from purchasing or using counterfeit components, there are certain best practices that you should follow. First, when ordering components and parts for your business, ensure that they are coming from a reliable and reputable supplier like Whistler Technology. As an AS9120 approved supplier, we fully understand the issues that the industry continues to face with regards to supply chain management, product traceability and the elimination of fraudulent and Counterfeit Electronic Parts.

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