Semiconductor Counterfeit Could Cost More than Money

Semiconductor counterfeiting means substandard parts flooding the market

Semiconductor counterfeits account for two out of every three counterfeit electronic components reported; as the semiconductor industry’s leading recruitment partner, IC Resources looks at the repercussions and rising cost of semiconductor counterfeiting.

Data gathered by Market Research Company IHS iSuppli shows that last year saw the number of reports of counterfeit electronic components rise significantly, in fact these reports have tripled in the last two years, with reports of counterfeit components in more than 100 types of device. Of these counterfeit parts, 66% were made up of five types of semiconductor: analogue ICs (integrated circuits), microprocessors, memory ICs, PLDs (programmable logic devices) and transistors, posing an annual risk of around $169billion (£106bn) for the global electronics supply chain.

According to Rory King, Director of Supply Chain Product Marketing at IHS, “The excessive cost of rework, repair, and customer returns for component failures is significant. For the global electronics supply chain, tackling the problem of counterfeit and fraudulent components has become an issue of paramount importance."

It is not just a concern in terms of money though, Analogue ICs alone make up 25% of counterfeit components reported, they are a component used in a wide variety of applications both military and commercial, and they can be found in everything from industrial and automotive devices to computers and consumer electronics. Each one of these five types of semiconductor can be found in military and commercial situations. Industrial users such as aviation, medical, military, automotive and nuclear are, in all probability, relatively minor consumers of counterfeit semiconductors but a consumer all the same. The risk to everyday consumer electronics may be nothing more than an annoying lack of reliability: a crashed computer or the loss of signal on a mobile phone; when you are considering the risk of failure to a component in a military application, or in the nuclear, medical, aerospace or automotive industries, then you are considering a possible catastrophe.

More stringent regulations should be put in place to combat this situation, something that was addressed in the US defence industry by an act signed by President Obama at the end of 2011. The National Defense Authorization Act for Fiscal Year 2012 ensures that those involved at every level of its global defence supply chain “implement processes and systems to analyse, assess and act on counterfeit and suspect counterfeit parts.”

Semiconductor counterfeiting is big business; these components often appear in the form of cheap but convincing looking fakes which can sometimes be hard to differentiate from the real thing. Or they are the real thing; they can be salvaged rejects from the original manufacturers. In either case they are substandard parts that do not meet quality requirements and cannot be expected to operate to the same standard as the originals.

IC Resources is the leading recruitment consultancy serving the semiconductor industry, for an informal and confidential chat about any recruitment issue you wish to discuss, contact us now.