Are electronic components getting harder to fake?

There has been a global decline in the number of suspect counterfeit and non-conforming electronic components, according to new figures.

Last year, there were 771 reports of suspect counterfeit and non-conforming electronic components compared with 1,041 reports in 2016, the figures published by electronics supply chain firm ERAI revealed.

The findings mark a gradual decline in reports over the past three years. Prior to this, reports hovered between 1,000 and 1,138 following a high of 1,282 reports in 2011.

Interestingly, ERAI noted that the decline comes as global sales of semiconductors increased. Last year’s figures show sales of more than $400bn up from almost $350bn in 2016.

“Factors that could cause this decline include better anti-counterfeiting procedures taken by organisations during the procurement process, more counterfeit parts being prevented from entering the supply chain through customs seizures and detentions, lack of enforcement of industry and government reporting requirements, and perhaps, some counterfeiters have reduced their activities due to improved and new counterfeit detection techniques,” the report said.

“On the other hand, it may also indicate that more sophisticated counterfeiting techniques are resulting in fewer counterfeit parts being detected and, therefore, reported to ERAI,” it added.

If the decline in reports was due to improved anti-counterfeiting and deterrence measures then this is a positive, but ERAI said it was too early to tell whether this was an overall trend. “It will be interesting to see if this trend persists through 2018 or whether the decline was only temporary.”

The company also looked at whether dodgy parts had been previously reported to ERAI. In 2017, 33 per cent of parts were reported more than once (an increase on 2016’s 20.9 per cent), while 67 per cent were new occurrences that had not been reported to ERAI before.

Of the 33 per cent of previously reported parts, almost half were reported two or more times, with five parts reported 10 or more times.

“Suspect/counterfeit parts that have not been previously reported are constantly entering the electronic supply chain and the threat of encountering one of these parts remains very high,” ERAI said. “Reporting suspect/counterfeit parts is a crucial step in counterfeit prevention. We highly encourage everyone to report all suspicious parts to ERAI to ensure all organisations in the electronics industry are aware of potential threats.”

According to the report, suspect counterfeit parts remained high in 2017 at 55 per cent while non-conforming parts – those parts that display one or more non-conformance(s) – represented 28 per cent of reports.

The 2017 figures are an increase on 2016 – 49 per cent and 24 per cent respectively.

Meanwhile, parts that displayed one or more non-conformance(s) and showed evidence of being a used part sold as new (SC/NC) accounted for 16 per cent of reports in 2017 – down from almost 30 per cent in 2016.

“The increase in parts classified as SC/NC in comparison to just non-conforming observed in 2016 did not continue to 2017 so we cannot conclude that it was the beginning of a trend related to more stringent regulations and standards that make parts previously designated as non-conforming to be marked as SC/NC,” the report said.

The most common parts that were reported as suspect counterfeit and non-conforming were integrated circuits, with programmable logic IC the most common at almost 20 per cent, followed by microprocessor IC, analog IC, and memory IC. Together, these four component types accounted for 63 per cent of all parts reported.

More than half the suppliers of the suspect parts were located in the US (53.6 per cent) followed by China (24.8 per cent). This finding could be considered surprising given that China is seen as a threat for the recycling and relabelling of e-waste but ERAI said its statistic is not necessarily reliable as it only considers reports where the supplier is identified so there is a possibility that China as a supplier is underrepresented.

ERAI also found that Xilinx remains the brand most frequently targeted by counterfeiters, accounting for 13.49 per cent of the dodgy parts reported last year, up from its first-place spot with 12.2 per cent in 2016.

All other brands reported represented under 6 per cent each.

Intel, which had ranked as the second most common brand to be affected by dodgy bits in 2016, dropped to fourth last year, with Altera Corp and Analog Devices jumping above it.