How to successfully avoid counterfeit components

Everyone thinks the problem is serious and may be underestimated. According to the "Industrial Weekly" report, the size of the counterfeit semiconductor market has reached 75 billion US dollars, and Havocscope estimates that 169 billion US dollars of counterfeit components have flooded the market. At the same time, the US government seized $123.892 billion worth of counterfeit electronics in 2016 (the most recent year the US Department of Homeland Security tracked in its year-end IPR review).

Industry analyst Steven Jeter, the founder of the European SIA ACC, said in a recent webinar, "SiliconExpert Market Insight: Counterfeit Risk & Mitigation Thought Leaders Group Discussion": "No one is immune, you will sooner or later Affected. From the component manufacturer's point of view, the number of counterfeit products reported in 2018 is three times that of 2017. It is not easy to solve this problem."

The breadth of this problem can be traced back to the many ways of fraud. A counterfeit device may be defined as a product that is “produced or sold in violation of international property rights, copyright or trademark law; a misstatement that violates intellectual property or other property rights laws; an electronic material that is intentionally misrepresented by the supplier, distributor, or manufacturer. Components," explains Robert Lowry of Oneida Research Services Technologies, in a white paper.

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

Device is an unauthorized copy

It does not conform to the original OCM design, model or performance criteria

Components are not produced by OCM or produced by unauthorized contractors

Components are unqualified, defective or used OCM products, but are sold as "new" or "workable"

Components have incorrect or fake marks or files

"Basically, counterfeit components are the ones you receive that are not the ones you expect," Jeter said. “This problem affects all industries, from vertical to commercial, to vertical components from passive to semiconductor. All products that are at risk of discontinuation or distribution are at risk of counterfeiting.”

For example, the current shortage of multilayer ceramic capacitors (MLCC) may have contributed to the increase in counterfeit goods, although the price of such components is only a few cents. Barbara Jorgensen, executive editor of EBN's sister publication EPSNews, said: "Maybe people think that the most expensive device is the most profitable target for criminals, but counterfeiting is changing with market demand."

Reducing and controlling the flow of counterfeit components into the market requires industry-wide efforts, and this goal has so far been difficult to achieve. Jeter said that many people are doing a good job of maintaining law and order. Similarly, everyone can and should play a role in reducing and controlling counterfeit components.

Industry organizations such as the Semiconductor Industry Association (SIA), ERAI, the Government Industrial Data Exchange Program (GIDEP), and the European Semiconductor Industry Association (ESIA) are doing their best to monitor or track counterfeit components. For example, SIA trained customs and border protection personnel to identify counterfeit components. However, these efforts rely on the willingness of OEMs, CMs, distributors, component manufacturers, and other private organizations to report in a timely manner when problems are discovered.

In addition, there is a need to make changes across geographical and police organizations. Jeter believes that improving international communication and data exchange is critical and requires extensive data exchange to create a successful business.

But for a number of reasons, companies don't tag counterfeit products. “Companies are reluctant to report because it means a gap in the supply chain, or the organization and its partners are lax in quality control,” Jorgensen said. “The lack of communication between organizations is one of the most important issues in sanctioning impersonation.” She also said that ensuring the confidentiality of reports is a good way to get better information.

Organizations should be 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 this is the right thing to do. However, there will be situations where a suspicious device is found to be effective and does not cause any harm."

In addition, organizations need to build a reliable process around how to handle suspicious counterfeit products. First, suspicious products should be quarantined to avoid inadvertent use or sale. 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 illegal products or devices.” The seminar participants agreed that the organization should Any product that is required to be purchased has a compliance certification.

Ironically, the main goal of purchasing is to save costs, and it is this pressure that makes it tempting to find alternative sources of supply. “Companies will encourage buyers to buy at the lowest possible cost, while counterfeit products are cheaper,” Jorgensen said. “Purchasing incentives are the biggest difficulty in stopping counterfeit products.” However, the cost can be high. Even if the components are working properly at the beginning, their life cycle may be shorter, which will affect the later functions of the product, ultimately damaging the brand and reducing customer satisfaction.

Testing is an important tool when it is not possible to make purchases through an authorized channel. Jeter said that visual inspections and electrical tests can be useful. However, it is not enough to just check. The only sure way is to test each device.

Finally, since components are cloned and produced in legal factories, component manufacturers should use zero-balanced accounting for products and materials. Isaacs said: "If you have a certain amount of material, you should have no surplus at the end. The cloning of the original product is an indirect competition for the product. Although zero balance is a complicated accounting, it is necessary."

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