Buyer Beware: Identifying Types of Counterfeit Components

In our previous article, Components Direct EVP of marketing Anne Ting outlined the ongoing problem of gray market and counterfeit components in the electronics supply chain. (See: With Counterfeit Components, Buyer Beware.) Despite the increased emphasis on regulation and enforcement, the porous nature of the supply chain still presents many opportunities for unauthorized components to leak into the market.

Although not all gray market components may be counterfeit, the responsibility (and the repercussions) often falls on the buyer, who must educate himself with the increasingly sophisticated techniques that counterfeiters use when passing off fakes as authentic parts.

Needle, Haystack

It's up to the buyer to identify counterfeit electronics but you can't identify one when you don't know what to look for. (Source: Gribiche, Flickr)

It's up to the buyer to identify counterfeit electronics but you
can't identify one when you don't know what to look for.
(Source: Gribiche, Flickr)

Frequently used methods
There are several ways in which electronics components, such as integrated circuits, connectors, and power-management devices are counterfeited, but five methods have emerged as the most-often used. These methods vary widely in their sources of production, degree of difficulty in being identified, and performance when making their way into everyday applications, but all are a threat to the electronics supply chain and have the capability to cause significant problems in mission-critical industries.

  • Empty shells: These are chips that have the same external form factor and top marks as authentic parts, but are empty inside. Since they are the most easily detectable, empty shells have not proven to be as widespread in the electronics supply chain as more sophisticated counterfeit methods. If one was to make its way into the manufacturing process, assuming that testing was conducted, the result, while expensive and time-wasting, would not be a catastrophic failure. For this reason, counterfeiters have increasingly turned to less easily detectable methods.
  • Pulls: Pulls may be legitimate parts that have been recycled and repackaged as new, authentic parts, often becoming damaged in the process. Discarded electronics equipment, such as laptop computers, are collected and shipped to counterfeit centers, often in third world countries where the process is not regulated and labor is inexpensive. Here, the products are disassembled in order to obtain the components. Printed circuit boards are heated so that the chips can be more easily “pulled” off. Some have lot numbers altered to make identification impossible. There are many examples of roadside operations, where components are de-soldered in uncontrolled environments, then repackaged and sold as authentic components. The heating and handling processes often damage the components, which, if not detected, can cause massive problems when utilized in electronics production.
  • Blacktopping: This is a process in which a thin black epoxy coating is applied to the top of a component so that a new part number and date code can be printed on it. This is typically done to non-military-grade components so that they can be reclassified as military-grade. Because the blacktopped part has the same dimensions as the one it is intended to copy, it usually passes visual inspection. However, because it is not military-grade, and is not designed to withstand the rigorous temperature, pressure, and other conditions of military use, the counterfeit part often fails. Blacktopping can sometimes be detected through x-ray inspection, but it is prohibitively time-consuming and costly to inspect every part, so some make their way into production. Counterfeit parts can also be detected by examining their indents — cavities that are purposefully created during the mold process. Originally clean-edged, indents are difficult to protect during the counterfeiting process, and often become unaligned or ragged. Indents are also affected by the sanding of original markings and by blacktopping, which fills the shallow cavities. Counterfeiters are becoming more aware of the need to maintain indents, and some have resorted to re-creating them to pass visual inspection.
  • Uninspected/untested parts: These are legitimate components, not counterfeits, but are equally dangerous if they make their way into the supply chain. They are manufactured on the same assembly line as authentic parts. In this case, however, insiders at the packaging facility will run the assembly line after hours, producing parts that fall outside the official supply chain and that the insider then sells directly for his own profit. Because these non-conforming parts do not subsequently go through the manufacturer's inspection and testing process, defective parts are not caught. These non-conforming parts are nearly impossible to detect from authentic parts, since production and markings are the same.
  • Sample/scrap parts: These are also legitimate components, which have been discarded because they are obsolete products, test failures, or excess inventory. “Dumpster divers” make a business of retrieving these components and reselling them. They are also difficult to distinguish.

In most of the above examples, if the counterfeit or non-conforming part is not detected, and makes its way into the supply chain, the results can vary. Some items won't work at all in initial testing, while others' performances may degrade over time. The worst outcome is an abrupt and catastrophic failure of a counterfeit or non-conforming part.

And in a mission-critical application like a guidance system or an engine controlled by a circuit board, the results could be disastrous. Fortunately, the industry has taken notice and is beginning to adopt a wide range of standards and best-practices to assist the components buyer in his never-ending fight against counterfeits.

Next month: We conclude the article series by exploring solutions to aid in the fight against counterfeit components, including best-practices from companies to ensure they are purchasing only manufacturer-direct parts.

1 comment on “Buyer Beware: Identifying Types of Counterfeit Components

  1. rohscompliant
    March 27, 2013

    Buying from an independent (broker) is akin to the “show me the CARFAX” television ad. As a buyer you need to inquire of the indy/broker there methodology of how they go about stopping counterfeits in 'their' supply chain. You need to know if they perform verification testing in house or do they sub contract it out; to certified test houses. And you need to ask them to produce an AVL listing all vendors they buy from and their 'certified verification test' houses. If an indy/broker tells you that their supply base (AVL) is a proprietary list …….it is a bunch of hooey! All of us broker/indy suppliers have a few BIG OEM's that we have relationships with other than that it is a franchised disty or another 'good' broker you may not be using. When an OEM is vetting us as a supplier (at my company) we willing offer out our AVL, showing ALL of our approved vendors, test houses …right down to who supplies our pens, toilet paper etc….not all care to see it but some do………… me the CARFAX or dont buy the car or the parts for that matter……if you cannot get the indy/broker to verify where parts are coming from or help you screen them for authenticity!!! That will stop a large % of parts moving through the 'open market'……….it is that simple…..dont take any chances…your job, your product and your company's reputation are on the line…….and maybe a pilot or astronaut, soldier or heart patient's life is on the line!!!!!! 

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