Focus on counterfeit clues and red flags

Today’s electronics manufacturing market is rife with challenges, all of which have put the supply chain top of mind. Combined with lengthening lead times, lingering shortages and shorter end-of-life cycles, these trends are giving counterfeiters the pressure points they need to slip more fake products into the marketplace than ever. Manufacturers need to increase their supply chain vigilance to ensure they aren’t caught in the trap.

US-based semiconductor firms face more than $7.5 billion in counterfeiting costs each year, according to the Semiconductor Industry Association. Government estimates put counterfeit semiconductors and other electronic parts as approximately 15 per cent of the Department of Defense supply chain. These are huge numbers.

Costs associated with counterfeiting are staggering. For OEMs, replacing a $2 part can cost as much as ten times that to replace once the chip has been put on a circuit board. Counterfeit electric, electromechanical and electronic parts jeopardize national security initiatives and harm an organization’s brand. The biggest threat, though, is to human life, both civilian and military, where a fake chip can lead to catastrophic failures.

Counterfeit products are getting harder to spot as well. There are seven types of counterfeit parts in the electronics supply chain: recycled, remarked, overproduced, out-ofspec, cloned, forged, and tampered. In many of these cases, better technology has allowed thieves to create more convincing fakes even more cheaply than before. Their bag of tricks has expanded to include acid washes, surface sanding, river washes and exposure to open flame to conceal a part’s true origin. Then, using digital printing techniques and lasers, crooks neatly relabel the part and put them on the open market.

Criminals are finding new ways to scam buyers. For example, some are embedding ‘trojan codes’ into FPGAs or memory components, which is something that can’t be tested for. These codes can give malicious actors a backdoor into systems and could potentially allow the IC to be reprogrammed by a bad actor.

Sticking to known suppliers and traditional sources is the best safeguard but increasingly that may not be a completely realistic choice. Instead, everyone must do what they can to sort good from bad. Buying from known good sources through authorized distribution and direct factory purchases should always be the goal. In addition to careful sourcing, buyers can leverage a combination of good avoidance practices, physical inspection and electrical testing of parts.

Never stray from the stringent quality standards. Establish protocols and procedures for component testing that include a range of approaches including: visual inspection, blacktop/ remarking testing, x-ray and destruct testing. No approach is foolproof, but persistent and consistent awareness of potential counterfeits is the best path forward.

Start thinking about mitigating the risk of counterfeit parts early in the new product introduction process. Purchasing should prioritize products that are early in their lifecycle and abundantly available. Two sources are always better than one. If a device is encountered near its end-of-life, look for potential red flags: "When the realization comes that a part just isn’t available, don’t panic and don’t lower standards."

• A supplier with no contractual arrangement with the original manufacturer. Know the chain of custody for the parts being bought

• What does the supplier’s marketplace reputation look like? What trade organizations does it belong to (ECIA, for example)?

• Have past experiences been good? Have partners? If they have no history, there’s a potential problem.

Some unauthorized suppliers may be trustworthy partners but dipping into that pool increases risk. If it’s a necessary and worthwhile risk, make sure the quality control team is on the job. Find as much information from the part’s manufacturer as possible: what does it look like and how it’s packaged/ labeled. Confirm the parts can be traced throughout their lifecycle, back to the original manufacturer if possible. Fair warning, that can be a big ask.

On hard-to-find parts, lower the risk profile by working down the sourcing continuum, always starting with authorized distributors. When the realization comes that a part just isn’t available, don’t panic and don’t lower standards. There are authorized sources that focus on EOL and obsolescence.

Buying from known "good sources through authorized distribution and direct factory purchases should always be the goal." 

To read the article on Electronics Sourcing, click here (Pg. 22): https://electronics-sourcing.com/wp-content/uploads/2022/10/ESNA-Nov22-DE.pdf