Financial and ID Technologies

Counterfeit electronics: Identification and prevention

26 August 2021
One of these encoders, which ceased to be manufactured in 2011, is fake. The counterfeit is on the top. Source: SMT Corporation

Counterfeit products are those that bear an unlicensed trademark that is similar to the trademark legitimately registered or that cannot be differentiated in its key qualities from the legitimate licensed brand. Counterfeiting occurs as a means of profiting by avoiding the costs of research, production, marketing and, in certain cases, the quality and dependability of the genuine product.

Occasionally, such look-alike goods are offered on the open market underneath a somewhat different brand name; in other instances, they are even marketed as genuine products. The first category of goods typically entails problems of intellectual property and copyright violation and may be traced back to a particular manufacturer. The latter goods are frequently introduced into commerce covertly, sometimes via uninformed or fraudulent distribution routes, and it is difficult to trace them back to their original supplier. Counterfeit electronics come under the umbrella of this second type of counterfeiting.

Counterfeit electronics are mostly detected in computers and telecommunications goods, as well as avionics, vehicles and also military electronic products. Such forgery and fakery occur whenever an item can be manufactured far cheaper than the real product. As per the association for Gray Market and Counterfeit Mitigation, counterfeiting costs legal electronics firms over $100 billion in global sales each year. For the user, counterfeiting-related electronics system failures might result in safety and security concerns. Even when the counterfeit part initially functions well, it still raises dependability issues since it has not been subjected to the real manufacturer's stringent quality assurance methods. Moreover, if counterfeit components find their way into safety-critical applications, system makers face risks because the counterfeit part's original manufacturer may not be recognized or put into any legal or regulatory framework.


Estimating the true prevalence of counterfeit electronics is challenging. It is difficult for an electronics equipment producer to recognize counterfeit items amid the hundreds of components necessary to create a system. In certain instances, the counterfeit component is introduced earlier in the supply chain and is included in a module or assembly supplied by a respectable manufacturer, but most manufacturers lack the means necessary to track the true origins of each component in their products. Counterfeit electronics items are often discovered when a system fails and the following root cause failure analysis reveals a pirated component. Unfortunately, failures are often not traceable, and there is frequently misunderstanding over whether the part was faulty, damaged (during assembly or usage) or bogus. Additionally, if the counterfeit performs identically to the genuine one, it might be extremely hard to identify until an issue develops.


Some companies and organizations exist to monitor and review counterfeit goods, with the U.S. Department of Defense Government-Industry Information Exchange Program among the most prominent. These initiatives have been successful in exposing firms to recognized counterfeit items, but they do not address the underlying problem. To avoid the introduction of counterfeit items into assembled systems, makers of critical systems must employ checks and protections to guarantee that the components and modules contained inside their systems are genuine. Such precautions may include custom-designed checks as well as strong overt and covert authentication procedures. This type of product security makes counterfeiting more difficult and costly.

Efficient overt authentication platforms require the public to identify, prevent and disclose counterfeiting, while covert authentication systems can notify corporate personnel and law enforcement agencies of counterfeiting activities. Anti-counterfeiting technology also supplies evidence in a court of law, where questions of product authenticity and responsibility may need to be resolved. Numerous authentication methods are applied for quick product authentication, including radio frequency identification (RFID) tags, data matrix codes and microtaggants.

Authentication technologies

RFID is a technique for supply chain management and commercial inventory management based on the storage and remote retrieval of data via RFID tags or transponders. Such a system is comprised of three components: a reader, a tag and a database. RFID tags with a microchip and an antenna are used to save and send authentication data including the brand name, manufacturer's name, a unique serial number and model. The tags are affixed to or integrated into an item for identifying it using radio waves. RFID readers, which consist of an antenna combined with a decoder and transceiver, produce radio waves that activate the tag, allowing it to read and write data.

Data matrix code is another authentication technology developed as a 2D code used to store product-specific data such as the component type's identification number, the manufacturer's identification number and the serial number of the particular product. Matrix codes encode data depending on the location of black patches inside a matrix. Every black spot has the same size and the location of the spot determines the data. These codes are directly applied to the item using lasers and are highly resilient, generally lasting the lifetime of the part and are scanned using a reader connected to factory floor computer networks and may be viewed remotely. Microtaggants represent a covert type of authentication technology applied to develop distinct codes that can act as a distinct fingerprint for an item.


Counterfeiting of electronic components poses a number of risks to businesses, including reduced safety and profit margins, and tarnishes the image of producers and suppliers. Counterfeiters target all sorts of parts and manufacturers. Authentication methods should be utilized throughout the supply chain, from the die to the final product packing, to ensure that counterfeit components do not make their way into the finished product.

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