Major key players in the electronics industry warned that component shortages would last well beyond 2022. With countless COVID-19-related lockdowns imposed to flatten the curve, it did not take a while for the electronics industry to feel the hit as it hindered the flow of raw materials to many manufacturing centers worldwide. As a result, fewer electronic components than usual were distributed through the global supply chain resulting in halting production of projects ranging from electric vehicles to consumer electronics.
In Real Talk with Tavi episode 27, an electronics industry podcast, guest speaker Ken Greenwood from Rochester Electronics; shared the difficulty in detecting counterfeits today and what they do to support manufacturers to mitigate the circulation of counterfeits in the supply chain.
“Counterfeiters are crafty with deceiving their clients. Gone are the days of poorly printed logos and misspelled manufacturer’s names. We are talking about recycled products sold as new components but have already served their purpose in another piece of equipment. These components are difficult to confirm without testing,” said Ken Greenwood, the Technical Sales Manager EMEA for Rochester Electronics.
Maintaining integrity in the supply chain became tedious as counterfeit products multiplied at an alarming rate. Manufacturers and other distribution channels are often faced with limited options as they deal with extended lead times, EOL components, and shortages in raw materials.
The chance of encountering counterfeit components is inevitable especially when we are in a technological “Big Bang” where there is a strong worldwide interest in electronic devices. Counterfeit components are more frequent than you may believe, and they pose a severe danger to supply chains in the electronics industry.
What are counterfeit parts?
Counterfeit parts are products whose sources knowingly misrepresent the parts’ identity. These counterfeit goods usually bear the trademark of a legitimate and trusted brand, but they were produced by another party and are not made to the specifications of the original manufacturer and are often produced illegally and sold at a profit. However, despite the resemblance, the quality and performance of counterfeits are far inferior to the original. Because counterfeit parts are of lower quality, they pose a serious threat if used in critical applications like military equipment, aviation navigation, life support, or spacecraft.
“There are 2 reasons why counterfeit products continue to disrupt our supply chain. A prime pointer to why counterfeit flood occurs is when the demand outstrips supply, a premium and desperation at a customer level and the ongoing need for obsolete products,” added Ken Greenwood
Counterfeit parts fail to meet required electrical safety procedures or minimal criteria, posing a risk to the unsuspecting consumer. In the worst-case scenario, if it is involved in a piece of medical equipment, it may produce inaccurate results, resulting in a false diagnosis or misinformation.
Counterfeit products continue to infiltrate the supply chain, despite the countermeasures implemented to stop them. This heavily affects the economic growth of legitimate businesses through lost revenue and replacement costs. Statistics by the Semiconductor Industry Association revealed that the counterfeiting of electronic parts in the US cost the computer chip industry more than $7.5 billion revenue annually.
How can you mitigate the risk of buying Counterfeit Products?
Companies looking to secure their supply chain integrity must be vigilant in keeping up to date on the global trend. Because of the size of the global market, companies must familiarize themselves with reliable sources and detect potential breaches of counterfeit parts at once. We highly recommend relying on authorized distributors to help end the risk of counterfeits as these distributors are fully certified and traceable back from the manufacturer.
However, there are times components become harder to source especially when the supply chain is under pressure. Buyers and manufacturers alike are more likely to buy components on the open market in this situation. Although we strongly recommend buying components directly from the manufacturer or authorized dealers, certain situations must undergo thorough inspection, comparative analysis, and testing to confirm components are credible.
What can IBS do for you?
As a global leader in innovative electronic components and logistics solutions, IBS electronics runs an efficient global procurement network with offices in Asia, Europe, and the Americas to supply a wide range of integrated procurement solutions for leading original equipment manufacturers and contract manufacturers in various industries. Together with White Horse Laboratories, we test each electronic components before shipping out the products to ensure that each part performs at the highest standard.
White Horse Laboratories supplies several tests that provides early detection and prevention of counterfeits the entire supply chain. They develop a customized risk mitigation plan and perform everything from screening third-party samples to creating a database of “known good parts” to high quality inspection standards such as AS081, AS6171, AS5553, CCAP-101, and IDEA-1010. Their scope ranges from verifying performance, speed, durability, and reliability of components to detecting defects and faults.
About White Horse Laboratories
White Horse Laboratories was founded in 2004 to combat the global rise of counterfeit electronic components at the source. Since then, they have been protecting buyers and sellers from this threat and have continuously expanded their range of services and the quality of their ISO-certified test lab. Their quality assurance team stands for absolute integrity and the best protection of your supply chain: adhering to strict international standards and with ISO9001 certification, employees are committed to meeting if not exceeding the quality expectations of both our company and our customers.
About IBS Electronics
Established in 1980, IBS Electronics is a recognized global leader in distributing innovative electronic components and logistical solutions to reduce supply chain complexities. We ensure quality by implementing ISO 9001:2015, AS9120B, and AS6081 protocols to provide quality parts and services that exceed our customers’ expectations On Time, Every Time. The company is headquartered in Southern California and operates in 100 countries. To learn more about our services, please visit our website at www.ibselectronics.com.