As the chip shortage lingers, suppliers and businesses are increasingly turning to alternate sources to find semiconductors for designs. However, increased sourcing of parts through non-traditional channels is creating new forms of risk in the market as these parts may not be the real deal.
While suppliers are turning to legitimate sources for semiconductors such as authorized electronic distributors and e-commerce distributors to find chips, due to extremely high demand and pressure to keep business moving, suppliers may inadvertently buy counterfeit parts.
“When the market is like this and parts are hard to find, customers will utilize any source they can to find what they need,” said Jeff Newell, senior VP of products at Mouser Electronics. “I think customers need to be very careful when buying from an unauthorized source. You simply don’t know where the product came from, was it handled correctly, is it even the real thing….”
According to Richard Barnett, CMO at Supplyframe, which operates the e-commerce parts aggregator Findchips.com, the supply chain issues will continue to lead to overall electronic component lead times and increase supply constraints. This means we are likely to see an increase in the manufacture and infiltration of counterfeit parts through the first quarter of 2023.
Dangers of counterfeit parts
The University of Florida recently published research into the dire effects of using counterfeit parts namely that:
- They create security and reliability risks for critical systems and infrastructure.
- They result in substantial economic losses for intellectual property owners.
- Their sale is a source of revenue for bad actors that could threaten other aspects of society.
- Their existence reduces the incentive to develop new products and ideas.
Additionally, the risks of counterfeit parts results in an increase in cost for testing prior to use in manufacturing to verify quality, packaging or even true counterfeit status, Barnett said.
“While manufacturers take measures to avoid counterfeits, the pressure they face to keep the business moving is extremely high and their resources to weed out fakes are limited,” said Jens Gamperl, CEO of Sourcengine, an e-commerce electronics distributor.
How to detect counterfeit parts
There are seven types of counterfeit parts in the electronics supply chain: recycled; remarked; overproduced; out-of-spec; cloned; forged; and tampered.
The University of Florida identified two techniques for the detection of counterfeit electronic components: physical inspection and electrical testing.
Physical inspection examines electronic components’ exterior and interior and range from simple visual inspection to high-tech imaging that requires x-ray, infrared, transmission electron microscopy (TEMs) focused ion beams (FIBs) and more.
Electrical testing captures chip curve trace, contact degradation, device parameter distributions and compares them to the device specifications.
Both methods, however, suffer from challenges. Physical inspection challenges include:
- Low confidence and large overheads with tests/equipment.
- The test can be destructive in nature.
- Lack of understanding of what defects are in each counterfeit type.
- Little, if any, metrics and data to facilitate automation in testing and classification of counterfeit components.
Electrical tests suffer from demand knowledge and require a test-setup for each IC as well as they need to distinguish between degradation due to counterfeiting and due to unavoidable process variations.
The University of Florida identified three ways that the current state of the supply chain could help to overcome the challenges of identifying counterfeit parts:
- A repository where data can be shared with the community to better identify counterfeit parts.
- Better physical inspection tools to aid in detection of different counterfeit types.
- Better electrical tests to detect counterfeits with confidence and potentially avoid the need to perform sometimes invasive physical inspections.
What are the best practices to avoid falling into buying from bad actors and potentially getting counterfeit products?
Mouser’s Newell said relying on authorized distributors helps to eliminate the risk of using these products as these distributors are 100% certified and fully traceable from each manufacturer.
“Even if you have to wait for that product, the confidence that you will have to be able to prevent failures and quality issues later, makes it a smart decision,” Newell said.
SupplyFrame agrees with the use of distribution channels as being a major source of visibility in the market.
“We support authorized distribution channels and confirm source of supply and logistics visibility where possible in our DSI Network, particularly for Chinese EMS sourcing from our BOM2BUY marketplace,” Barnett said
Working with organizations that have strong counterfeit mitigation policies is important to avoid this problem during the procurement process.
Sourcengine has invested heavily in using in-house x-ray machines, decap machines, dimensional inspection equipment and high-resolution microscopes to identify counterfeits.
“Part of the value of our ecommerce marketplace is the backing of our human expertise in procurement and purchasing and our guarantees of part authenticity and traceability, all while facilitating the purchase of millions of parts from thousands of sources around the globe,” Sourcengine’s Gamperl said.