Counterfeit electronics remain the scourge of the electronics industry. Counterfeit parts can create safety hazards, grab profits and tarnish a company's image.

All agree that the problem is serious and probably underestimated. According to Industry Weekly, the counterfeit semiconductor market has reached $75 billion, while Havocscope estimates that $169 billion of counterfeit component products have flooded the market. Meanwhile, the US government seized $123.892 billion worth of counterfeit electronics in 2016, the most recent year tracked by the US Department of Homeland Security in its year-end intellectual property review.

Industry analyst Steven Jeter, founder of SIA ACC Europe, said during a recent webinar, 'SiliconExpert Market Insights: Counterfeit Risk & Mitigation Thought Leaders Panel,' that 'No one is immune and sooner or later you will be affected.' From the perspective of component manufacturers, the number of counterfeit products reported in 2018 was three times higher than in 2017. And it's not going to be easy.'

The breadth of the problem can be traced to the many ways in which counterfeiting can take place. Counterfeit devices can be defined as 'products produced or sold in violation of international property, copyright or trademark law; Misstatements that violate intellectual property or other property laws; Electronic components whose material, performance, or characteristics are intentionally misrepresented by suppliers, distributors, or manufacturers.' Robert Lowry of Oneida's Research Services technology subsidiary explained in a white paper.

The Semiconductor Industry Association (SIA) points out some ways to identify counterfeit components:

The device is an unauthorized copy

It does not meet the original OCM design, model, or performance standards

Components are not manufactured by OCM or by unauthorized contractors

Components are substandard, defective, or used OCM products that are sold as 'new' or 'working.

Components have incorrect or false marks or documents

'Basically, a counterfeit component is a product that you receive incorrectly instead of what you expected.' 'Jeter said. 'This issue affects all industries, from commercial to military verticals, from passive to semiconductor components. All products at risk of discontinuation or distribution are at risk of counterfeiting.'

For example, the current shortage of multilayer ceramic capacitors (MLCCS) may have contributed to an increase in fakes, even though such components sell for only a few cents. Barbara Jorgensen, managing editor of EBN's sister publication EPSNews, said: 'One might think that the most expensive devices are the most lucrative targets for criminals, but counterfeiting events change with market demand.'

Reducing and controlling the flow of counterfeit components into the market requires an industry-wide effort, which has so far been difficult to achieve. Jeter said there are many people who do a good job of policing, and just as everyone can and should play a role in reducing and controlling counterfeit components.

Industry groups such as the Semiconductor Industry Association (SIA), ERAI, the Government Industrial Data Exchange Program (GIDEP) and the European Semiconductor Industry Association (ESIA) are doing what they can to regulate or track counterfeit components. For example, SIA has trained customs and Border protection officers to identify counterfeit components. However, these efforts rely on the willingness of Oems, CM's, distributors, component manufacturers, and other private organizations to cooperate and report problems when they are found.

In addition, it will take cooperation across geographic and policing organizations to make a difference. Jeter believes that improving international communication and data exchange is crucial and that extensive data exchange is needed to create a successful business.

But companies don't flag counterfeit products for a number of reasons. 'Companies are reluctant to report because it implies a gap in the supply chain or lax quality control by the organization and its partners,' Jorgensen said. 'The lack of communication between organizations is one of the most important problems of inadequate sanctions against counterfeiting.' She also said that guaranteeing the confidentiality of the report was a good move to get better information.

Organizations should be further encouraged to report any suspected counterfeit products. Vern Densler, senior manager of project management at SiliconExpert, said: 'People are afraid of reporting, but we need to change it because it's the right thing to do. However, there may be situations where a suspicious device is found to be effective and cause no harm.'

In addition, organizations need to establish a reliable process around how to deal with suspected counterfeit products. First, suspicious products should be isolated so that they are not inadvertently used or sold. It should then be handed over to the appropriate authority. 'You have to make sure you know where it is.' 'Densler said.

Good practices include buying products only through authorized channels. 'This is the best way to reduce the risk of counterfeiting,' said David Isaacs, vice president of government affairs at SIA. 'Buying through an e-commerce portal increases the risk of encountering an illegal product or device.' Seminar participants agreed that organizations should require compliance certification for any product they procure.

Ironically, the main goal of purchasing is to save costs, and it is this pressure that makes it tempting to find alternative sources. 'Companies will encourage buyers to buy at the lowest possible cost, whereas counterfeit products are cheaper,' Jorgensen said. 'Purchasing incentives are the biggest difficulty in stopping counterfeit products.' The cost, however, can be high. Even if the component works properly at the beginning, its service life cycle may be short, which affects the later function of the product, ultimately damaging the brand and reducing customer satisfaction.

Testing becomes an important tool when purchasing through licensed channels is not possible. Jeter says visual inspections and electrical testing can be useful. However, spot checks are not enough. The only way to be sure is to test each device.

Finally, because components are cloned in legitimate factories, component manufacturers should adopt a zero-balance accounting method for products and materials. Isaacs says, 'If you have a certain amount of material, by the end you shouldn't have any left.' Cloning of the original product is indirect competition to that product. While zero balance is a complex calculation, it is necessary.'