Electronic equipment manufacturers and their customers must be cautious about counterfeit electronic components. They need to be especially vigilant about their supply chain as a majority of counterfeit cases reported are associated with purchases through independent distributors. As many components needed to support and produce electronics are no longer in current production, independent distributors are often used to fill this gap. It has now become necessary for all distributors of electronic components and manufacturers of electronic equipment to inspect incoming electronic components for authenticity.
The manufacture of counterfeit electric, electromechanical and electronic (EEE) parts is not a new problem for the industry, but sadly, it is a problem that continues to cost brands billions of dollars annually, jeopardizes national security initiatives, and harms the individuals buying non-authentic products. According to the Alliance for Gray Market and Counterfeit Abatement, it is estimated that legitimate electronics companies miss out on about $100 billion of global revenue every year because of counterfeiting. Statistics by the Semiconductor Industry Association (SIA) reveal that the counterfeiting of electronic parts in the US, cost the computer chip industry more than $7.5 billion in revenue annually, translating into 11,000 lost jobs. Since counterfeit parts often have inferior quality and different specifications, they may represent a hazard if incorporated into mission critical systems such as military equipment, aircraft navigation, life support, or space vehicles. The financial repercussions of counterfeit components reach far beyond the cost of merely replacing the items. For example, in certain higher-end electronic systems, a component worth $2 can cost as much as $20 to replace if it is found to be a fake after it is mounted on a circuit board.
Problems
Effective approaches to avoiding counterfeits
1. Always purchase components directly from the original manufacturer, or from an authorized distributor. Electronic parts sourced through other channels are often misrepresented as to their origins or quality. Visually examine all labels, packaging, and parts. Compare these elements to parts of a genuine model from the original component manufacturer (OCM) and look for any differences between the two.
2. Employ comprehensive brand protection solutions that work together to protect supply chain integrity and confirm product authenticity. Overt authentication features included on Nanotech’s LiveLogo™, LivePortrait™, and LumaChrome™ nano-optic security labels can be combined with an extensive range of identification markers that include QR codes, serialization, production data, microtext, covert and forensic elements, and a suite of other unique identifiers. Authentication features include:
Conclusion
Nanotech’s anti-counterfeit security labels can help you safeguard supply chain integrity, improve operational efficiencies, combat product diversion and grey market activity. Weather you are an OCM, Franchise Distributor, Independent Distributor or Wholesaler remember – prevention is always the first line of defense. Security labels along with a robust arsenal of inspection, identification, detection, documentation, and certification techniques minimize the risk of incorporating or shipping out a counterfeit electronic component. As many companies are learning the hard way, anti-counterfeiting plans require a relentless, multifaceted, methodical effort, active monitoring of potential trouble spots, and judicious use of novel anticounterfeiting technologies.
Sources
IEEE Transactions on Components & Packaging Technologies (Volume: 30, Issue:1)
Open Journal of Social Sciences 2013. Vol.1, No.7, 12-16: The Counterfeit Electronics Problem
https://en.wikipedia.org/wiki/Counterfeit_electronic_components
https://www.trentonsystems.com/blog/counterfeit-electronic-parts