Counterfeit electronics growing at record levels, says IHS

Incidents in the USA involving counterfeit electronics are continuing at a high rate in 2012, continuing a trend seen in 2011, according to a new report.

The data - compiled by IHS iSuppli - is elevating concerns that fake components may end up in critical equipment destined for the aerospace, defence and other industries. Counterfeit parts often are cheap substitutes or salvaged waste components that fail to meet quality requirements, leading to potential failures.

The number of incidents has been approximately 107 per month from the start of the year through August, around the same rate as in 2011, with the average number of seized counterfeit parts hovering at around 100,000, although IHS says these are likely to be conservative estimates.

The findings highlight "the need for continued vigilance and improved detection and avoidance measures at a time when US defense representatives are scheduled to update acquisition rules," says the market research firm.

The US Department of Defense is due to update component acquisition regulations this month as part of a series of measures for the detection and avoidance of counterfeit electronic parts.

"Counterfeit parts represent a serious and growing risk to the electronics supply chain in general and to the aerospace and defense industry in particular," said Rory King, director, supply chain product marketing at IHS.

"The spotlight is shining squarely on tighter policies and procedures aimed at counterfeit detection and avoidance," he added, noting that an increasing number of supply chain participant companies are joining anti-counterfeiting organisations like ERAI (Electronic Resellers Association International).

Incidents of counterfeit parts have quadrupled since 2009, according to earlier IHS reports. On average, more than 1.4 million purchased parts have been involved in suspect counterfeit and high-risk transactions during each year for the past decade.

Additional information is available from IHS here.