The electronics industry faces a mounting challenge as counterfeit board-level electronic components continue to infiltrate global supply chains, posing significant risks to manufacturers and end-users alike. According to the Semiconductor Industry Association, counterfeit components cost the industry approximately $7.5 billion annually in lost revenue, a figure that underscores the scale of this issue.
As supply chain disruptions persist, the prevalence of counterfeit parts has surged, with a 2023 report from ERAI noting 786 suspect or nonconforming parts, a 35% increase from the previous year.
The availability of counterfeit board-level electronic components has been exacerbated by ongoing global supply chain challenges, including semiconductor shortages and extended lead times. These conditions have driven some manufacturers to source components from unverified or gray market suppliers, increasing the likelihood of encountering counterfeit parts.
Honest Components Inc, a distributor of board-level electronic components, says it has observed a notable uptick in counterfeit activity, particularly with end-of-life or obsolete components. In their recent findings, the company highlights that many counterfeit parts originate from recycled electronic waste, often processed in regions like China, where boards are stored in poor conditions without proper electrostatic discharge protection.
“The risks associated with counterfeit board-level electronic components are multifaceted. These parts often fail to meet the quality and performance standards of genuine components, leading to potential system failures, degraded performance, and safety hazards. In critical sectors such as aerospace, automotive, and medical device manufacturing, the consequences can be severe. For instance, counterfeit components in avionics or braking systems could compromise safety, potentially resulting in catastrophic failures. Additionally, counterfeit parts may harbor embedded malware, introducing data security risks that can compromise sensitive information, as noted in recent industry analyses,” Jackie Schwab, President of Honest Components.
“Employing rigorous testing protocols to detect fakes and identify counterfeit electronic components is a top priority. Their process includes external and internal visual inspections, dimensional checks, marking permanency tests, and electrical testing. However, the sophistication of counterfeit parts has increased, with many passing basic inspections due to advanced replication techniques. This trend underscores the need for comprehensive testing methods, such as third-party verification and supply chain traceability, to ensure authenticity.”
Ms Schwab explains that the financial and legal implications of using counterfeit board-level electronic components are significant. Businesses that unknowingly incorporate fake parts into their products may face costly recalls, legal liabilities, and reputational damage. In regulated industries, failure to comply with standards like the International Automotive Task Force 16949 or the FAA’s Suspected Unapproved Parts Program can result in hefty fines and operational disruptions. “We emphasize the importance of sourcing from authorized distributors to mitigate these risks, ensuring a transparent supply chain that prioritizes quality and authenticity,” she adds.
As the electronics industry continues to grow, with the global EMS market projected to reach $856 billion by 2028, the threat of counterfeit components will likely intensify. “Manufacturers must remain vigilant, adopting robust counterfeit mitigation strategies to protect their operations and customers. We are committed to supporting the industry through our expertise in identifying counterfeit electronic.
