Counterfeit Electronic Components: The Dangers and the Consequences

carlos-irineu-da-costa-s3bgMm0fFVI-unsplash

One of the biggest concerns for electronic manufacturing companies should be the standard of the components being used to create electronic devices. 

29% of people have been reported to have purchased a counterfeit item, and about 17% of people say that they do so on an occasional basis in the United Kingdom. 

Counterfeit electronic components have been a big challenge for manufacturers, and the counterfeit industry keeps thriving by adopting new methods to keep masking 

sub-standard parts. 

In this blog post, we’ll be discussing the dangers and consequences of using counterfeit electronic components, and how you can, and should, avoid using them for your electronic devices. 

What are Counterfeit Electronic Components?

Counterfeit electronic components are illegal or unauthorised imitations of parts that are intentionally misrepresented as genuine parts from the Original Equipment Manufacturer (OEM) or an authorised company. 

Image Source: Matric

A counterfeit component can also be a used electronic component that has been altered and knowingly misrepresented as new without disclosing the prior usage information to intending customers. 

Oftentimes counterfeit components fail to meet up with the required performance that is needed for electronic products to work efficiently. 

Once a counterfeit part is present in the system of a device, it can cause intermittent delays in performance or limit the use of the device as a whole. This can then lead to the malfunctioning of the electronic device.

In cases where the counterfeit components are a part of medical equipment, the result could be fatal. Counterfeits can fail at any time even though they may pass initial testing. This is why many counterfeit components go undetected until an issue occurs.

Most counterfeits can’t withstand extreme conditions like high temperatures and voltage ranges and this can lead to different kinds of accidents during the use of the electronic device. 

Why Do People Use Counterfeit Components?

With the grave dangers associated with using counterfeit components, why do manufacturing companies still use them for production?

Some companies do not know about procuring components and can end up buying counterfeits. Here are a few reasons that help explain the use of counterfeit parts in the manufacturing industry

  • Defects in logistics planning. If the manufacturing company has flaws in inventory for product lifecycle or outdated parts they can be forced to use counterfeit components for production.
  • Choosing the cost of components over trusted sources can make a company purchase counterfeits instead of originals. 
  • Inadequate accountability practices can also be a reason why manufacturing companies find it hard to get genuine components. 
  • Deliberate misrepresentation from the component seller to the manufacturing company.
  • Scarcity of parts caused by component’s end-of-life stage.
  • Lack of proper testing and inspections that can help reveal counterfeit components by manufacturing companies.
  • Insufficient law enforcement resources to track and trace makers and sellers of counterfeit components.

Where do counterfeit components come from?

There is no sole source of counterfeit electronic components, so it’s very hard for them to be stopped. Although most originate in Asia, counterfeit parts can, in theory, come from anywhere. Anyone with the knowledge and resources to create electronic parts can make counterfeits and sell them to manufacturers.

How are counterfeit electronic components made?

Most counterfeit electronic components start from the acquisition of discarded parts and components from electronic waste.

Different things are done to such junk parts such as acid washes, surface sanding, river washes and exposure to flames to conceal the origin of the component.

After this, the parts are often relabelled with digital machines and then packaged and sold to different places across the world. 

Another common method of making counterfeit electronic components is producing the parts in a factory without labelling and then repackaging them for selling.

The black market for counterfeit electronics components is a big challenge to the electronics industry and unfortunately, identifying and prosecuting counterfeiters is an extremely difficult task. 

This is why defence against the purchase of any counterfeit components is the first line of action if we’re hoping to win the war against using counterfeits for production.

How to identify counterfeit electronic components 

This is a common question asked by a lot of manufacturing companies. Before you can know a counterfeit is being used, you need to identify it.

Here are a few tips that can help you identify counterfeit electronic components

  • Incorrect Information

This is often the easiest way to identify counterfeits, often manufacturers of counterfeit components cannot properly replicate the markings on the duplicate part.

Image Source: Electronics 360

There may be mistakes like incorrect fonts, numbers or logos, misspelt words and even the incorrect country of origin. This can serve as proof that a component isn’t genuine.

Manufacturing companies must be alert and check the information on every component for proper documentation and to be sure that the electronic components they are buying are genuine.

  • Identifying Resurfacing

The producers of counterfeits have become quite good at replacing the plastic and fine glass mixture that is in most of the modern-day plastic electronic components. 

The process of resurfacing is called blacktopping. It involves sanding the original markings and applying a coat of polymer to cover the component as new. 

Sometimes this effect can leave visible clues and checking for this can help production companies identify counterfeit electronic parts.

  • X-Ray Inspection

Electronic components can be tested with X-ray to verify their authenticity. This process works like a normal X-ray and it allows you to view the internal components of the parts you’re buying. 

Image Source: GlenBrook Technologies

An X-ray inspection can help you see things like inconsistent sizes, visible delamination, missing wire bonds and so on. 

Most counterfeiters often overlook the lead-free status of components, the inspection can leverage this and check if the component is free of lead.

  • Destructive Testing

In some cases, the companies may be pushed to use more invasive ways to determine the genuineness of a component. The process is called destructive because the components can not be used afterwards.

A destructive method commonly used is called decapsulation. It involves placing abrasive acids on the surface of the component until the internal dye reveals itself.

Then it will be inspected using a microscope which will further reveal if the part is counterfeit. 

Another method is removing the lid of the component if it’s made from ceramic packaging, this is called de-lidding.

In the case of blacktopping, the destructive method used is the use of acetone. It’s applied to the top of the chop with a cotton swab, if residues from the chop come off, it’s proof that it’s a counterfeit component.

You can further perform a scrape test to be sure if a clear coat was used to hide the blacktop while repackaging the counterfeit component.

  • Scanning Acoustic Microscope

A Scanning Acoustic Microscope (SAM) is used to locate the laser etching of blacktopping in a component. If etching is discovered this is a sign that the component has been resurfaced with sandpaper to cover up the original markings. 

The use of SAM to discover this etching doesn’t destroy the component unlike the acetone treatment.

  • Physical Deformities

As you have read earlier, some counterfeit components are from the junk parts of electronics that are sold off as though they are new. It’s best to check for physical wear and tear like scratch marks or bent leads. This can help you find out if the components are genuine

Although these methods help identify potentially counterfeit electronic components, manufacturing companies should limit purchases to authorized distributors and ensure the components go through multiple tests to prove genuineness.

Buying from authorized distributors is a safe way to avoid getting counterfeit components, although you’ll need to be careful of obsolete electronic parts and ensure your components are stocked up. 

You should also keep in mind that counterfeiters will keep improving and trying not to get caught. This is why you should stay vigilant and be up to date concerning the latest information about counterfeit components. 

The Dangers and Consequences of Counterfeit Electronic Components

Now that you know more about identifying counterfeits, in this section, we’ll be talking about the dangers and consequences of associating with countries and tips on how you can avoid it.

Possible dangers of using counterfeit components 

The usage of counterfeit electronic components carries a high safety risk for every user and this includes severe injury and death. It can compromise the security, health, effectiveness, and overall integrity of a manufacturer’s products.

Counterfeit electronic components, especially ones that have been identified for military-grade use, typically have not undergone extreme testing for high or low temperatures, humidity, pressure and other conditions and most times do not meet the required standards. If these parts were to fail during combat, the consequences could be severe.

Aside from these possible dangers, counterfeit electronic components can also be associated with financial and economic consequences.

The Semiconductor Industry Association (SIA) estimates that counterfeit parts cost manufacturers more than $7.5 billion annually. This also translates to the fact that almost 11,000 people risk losing their jobs. 

Some other dangers associated with the usage of counterfeit electronic components include:

  • Too many inventories taken by the manufacturing companies can slow down production
  • Losing credibility with customers and potential customers, once there is news of your company using counterfeits, people will not want to be associated with you
  • Overall  system failures 
  • More time being spent reworking and repairing the electronic devices once the counterfeit part stops working

Consequences of Counterfeit Electronic Components

The impact of using counterfeit electronic components can be very devastating for both the production company and the consumers using the electronic products.

Here are a few consequences of using counterfeits for electronic devices:

Increased Product Replacement

When the electronic devices do not function as they ought to, the manufacturing company is faced with the challenges of trying to correct the issue. 

There will be a likely product recall for improvement and this can lead to bad publicity and serve as a poor representation of the identity of the company. 

The product can also be replaced by manufacturing to stop the cases of any other malfunctioning. Both decisions can cause a long-term impact on the image of the company.

Manufacturing Downtime

Most companies after discovering a component identified as counterfeit may have to stop production and conduct investigations to find the source and look for a replacement.

The time spent correcting this issue can largely impact the company’s production and not only this but also the cost of replacing the counterfeit component and money spent on the investigation. 

The total monetary and time costs that the manufacturing company spends to retrieve damaged electronic products, repair them and then send them back to the customers can be very high. 

Potential Penalties from Governmental Agencies 

Although usually dependent on the product, the manufacturing company that uses counterfeit components may be subjected to penalties for not paying attention and finding out that the parts were fake. 

For example, the U.S. Government has the National Defense Authorization Act (NDAA) that requires manufacturing companies to tighten supply chain traceability and ensure parts procurement are from authorised sources to minimize counterfeit risk. 

Systems Failure 

Malfunctioning electronic components can pose threats to different systems and mission failure in cases of components used in military equipment. Counterfeit electronic equipment also poses cybersecurity threats, this has been identified as one of the common security challenges in this century. 

There are a lot more consequences than those that have been listed here, production companies need to ensure they are using genuine parts at all times.

Effective ways to avoiding counterfeit electronic components 

Fortunately, different ways manufacturing companies can reduce the risk of selling electronic devices or products that are made with counterfeit components.

Here are a few of those useful ways: 

  • Having strong procurement policies

Manufacturing companies should ensure that their components and parts come from authorised and trusted sources. When researching parts distributors be sure to ask about their process, sources, and storage and you can even ask other people about them.

  • A good quality control inspection

Inspection of parts visually is one of the most simple yet effective methods for avoiding counterfeit parts. Electronic manufacturing companies must have and keep a complete and well-detailed inventory of their components. 

This will make it easy to ascertain the validity of components and easily fish out counterfeit parts before production.

  • Pay attention to relevant certifications

When it comes to avoiding counterfeit electronic components, manufacturing companies can also be on the lookout for relevant certifications and quality assurance documents when finding suppliers. 

A supplier with information and certification is more credible than one without it.

  • Hire a third-party for checks

Although this can be very stressful, another way to avoid purchasing counterfeits is to hire a third-party company to check your components. This will be helpful in case you miss out on anything.

The service of the company can also include obsolescence management to ensure there’s a strategy in place for your company to thrive if a component becomes obsolete.

What Vital Electronics can do to help

At Vital Electronics, we are independent distributors of electronic components for manufacturing companies globally and our processes are designed to ensure that our procurement is fully traceable and authentic. 

This can help you reduce the risk of counterfeit electronic components. Our primary goal is to help you stay in production with our shortage supply system and also help you maximize your ROI in case of excess stock.

We have a collective 105 years of sourcing experience and our global sourcing capability can help keep your production running. We are also ISO9001:2015 and ISO14001:2015 certified, this means that we’re an authentic and authorised brand. 

Being a member of ERAI allows us to search for counterfeit components, report any case of counterfeits, report a counterfeit part supplier or company, search for a reported counterfeit supplier, and source parts from genuine sources. 

As a BSI member, you can trust us to solve any challenges or issues you may have with counterfeit electronic components. We have strict processes in place that guide our procurement processes and help prevent counterfeit parts.

In addition to this, all appropriate staff have been trained in the awareness and prevention of counterfeit electronic components and suspected or identified counterfeit components are reported. 

If you have an upcoming production or you’re on a search for authentic supplies and are worried about counterfeit electronic components harming your supply chain and production rate, you can contact us to see the services we provide and how we can help you.

Conclusion 

It’s been well established that counterfeit electronic components are harmful to manufacturing companies and even more when used to produce a device or equipment.

There is no final way to avoid counterfeits generally, production companies must reduce the risks of purchasing them and do all they can to identify them as fast as possible.

Emily Lawrence

Share This Article

Related Blogs

Related Blogs

Blog

Introducing our VECTr Portal

Introducing VECTr, your new portal for monitoring excess stock sales, providing transparency where once there was none. Users of our consignment excess sales model can

Learn More