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One counterfeit part every 15 seconds

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More than 12-million parts have been involved in counterfeit incidents during the period spanning the start of 2007 through April 2012.

This is according to Rory King, director: supply chain product marketing at IHS, addressing an audience of electronics industry participants attending the ERAI Executive Conference, co-hosted by IHS.

In his presentation, King noted that reported incidents of counterfeited parts amounted to 1 363 in 2011. However, each incident can include thousands of separate parts, adding up to 12-million over the past five-and-one-quarter years. This equates to slightly more than one counterfeit part every 15 seconds.

“Last year there was a record number of counterfeit incidents reported,” King said. “Altogether, the last five years has seen an all-time high in counterfeit reports.”

While the rise in semiconductor counterfeiting is often laid at the feet of China, King noted that the country actually is not the location where most counterfeits are reported.

“Companies in two countries accounted for two-thirds of counterfeit incident reports in 2011,” King said. “China was actually number two, while the US was number one. The two countries were neck and neck, with China at 32% and the US at 33%. So, in terms of counterfeiting, the enemy is also within.”

While the US and China dominate in terms of reports at a combined 65%, the countries of origin accounting for the counterfeit parts is more disparate, with the four nations of Malaysia, South Korea, Japan and the Philippines collectively accounting for 64% of reports, according to ERAI data. However, the accuracy and value of this data is limited, King noted, given that counterfeiters are highly skilled at disguising the true origin of their wares.

For many companies, particularly those in the defence and aerospace industries, much of the counterfeit risk lies in obsolete parts.

“Slightly more than one out of every two counterfeit parts shipped during the decade from 2001 to 2011 are obsolete,” King noted. “Obsolete parts are where a lot of counterfeit activity is occurring. This underscores the importance of obsolescence management and lifecycle planning. Although obsolescence management is critical, more than one-third of counterfeit incidents are for active components underscoring that this issue is not exclusively a matter of obsolescence management. Vigilance in managing continuity of supply is very important, and companies need knowledge of actual counterfeit parts that are currently in circulation in the supply chain.”