$250 billion is lost each year due to counterfeit electronic components.  Unfortunately, counterfeit parts are nothing new for electronics manufacturers. One of the primary reasons for counterfeit parts is supply and demand.

As the consumer market continued to grow throughout the 80’s and 90’s the supply base had a difficult time keeping up.

Enter counterfeit parts.

Counterfeit parts were introduced into the supply chain through ‘gray market electronics brokers’. Unfortunately, part obtained this way could ultimately lead to failure for your electronic assembly.

Non-functional Parts

According to the International Chamber of Commerce, 80% of consumers in the developed and developing world regularly purchase counterfeit products. However, they are usually unaware of the dangers associated with using these products. One of your biggest risk is non-functional parts. These non-legitimate parts result in immediate problems when components do not function as expected. May cause delays in manufacturing, but the products are unlikely to make it into consumers’ hands because they are quickly identified as non-functional.

Functional Substandard Parts

Another big issue with counterfeit parts is not that they don’t work; it’s that they sometimes work. These are considered functional substandard parts. These can expose a company to liability because the components work as expected, but they may be refurbished or substandard, and can quickly deteriorate after the end user begins using them. This makes it extremely difficult to know when and if they will fail. These parts might work during testing or work for a long period of time before failing.

 

Types of Counterfeit Electronic Components

Counterfeit electronic components can come from a variety of distributors, resellers and manufacturers in countries around the world. These counterfeiters use many different methods to produce and distribute their fraudulent parts, so forged goods can show up in many various forms. These are some common types of  counterfeit electronic components.

  • Low-spec components made to look like high-spec ones – Some counterfeiters remove the part numbers from low-spec components and replace them with the part numbers of high-spec parts. They might also put low-spec items in the packaging for a high-spec component, or mix lower-quality pieces in with higher-quality ones. They might even alter the overall appearance of the item to make it look like a higher-quality version. They can then sell them for a higher price because they appear to be of better quality.
  • Defective parts passed off as qualified ones – If something is wrong with a part, a manufacturer might mark it as functioning correctly and attempt to sell it as if it were.
  • Used components sold as new ones – Counterfeiters might also take used components and try to make them look like new ones by repackaging them or even refurbishing them. They might paint the part or even repair it, but selling it as brand new is still counterfeiting.
  • Components purchased directly from unqualified businesses – Companies might also buy counterfeit items directly from unqualified manufactures, assemblers or suppliers. They may not realize the company is not qualified, and the counterfeiter might make themselves appear as if they are a legitimate business. Other times, a company might buy parts they know might be counterfeit to save money.

Strict Quality Measures

These counterfeit parts decrease customer satisfaction and increase costs for legitimate manufacturers. This is why your electronic contract manufacturer should have a strict quality control system in place to prevent counterfeit parts from entering our supply chain at all.