Analysis: Fighting the fakes
Counterfeit components are a continuing headache for the electronics industry. E&T reports.
The UK Electronics Alliance intends to launch a website to let engineers share information on fake components in an attempt to stem the flow of damaging counterfeits from the Far East.
In 2008, the UKEA estimated the cost of electronic counterfeiting in the UK alone came to £1bn per year. Estimates vary of losses to electronics companies worldwide from lost sales and the cost of dealing with failed products.
Peter Marston, consultant to Rochester Electronics, said at a seminar held on counterfeiting at the last month's National Electronics Week show in London that worldwide losses to component manufacturers could be as high as £15bn.
"It has only been since 2002 that the semiconductor industry began to sit up and become aware that counterfeiting was a major problem and was affecting their revenue," said Marston. But, as companies react, the fraudsters are changing their approach: "Counterfeiters are getting smarter and smarter. Rather than deliver direct from the Far East, they are shipping through Russia, Turkey and some of the Southern and Central American countries. They ship by strange routes to try to confuse people."
Although counterfeit products have been found in US nuclear power stations, Marston said there is little evidence of fake electronics causing deaths up to now. "But semiconductors are used in lots of life-critical applications. There are safety critical systems going into cars. If we start to see counterfeits going into those, it is only a matter time before they cause deaths," he claimed.
"Fortunately, the circuit breakers were not found to be protecting anything critical. But they didn't do very much because there wasn't very much in them," said Adam Fletcher, chairman of the Electronic Components Supply Network (ECSN).
Fletcher said that although a common trick is to disguise low-value or broken components as more valuable parts, a growing number of chips are turning out to be clones, most likely made in Chinese fabs frustrated by their inability to get onto the approved supplier lists operated by the big consumer OEMs. "The interesting thing is that those are often not expensive components. They have to sell a lot to make any money on them," he said.
Companies in the military and industrial sectors are among the hardest hit by counterfeiting because counterfeits are often made in response to market shortages.
"Environmental legislation is impacting this," said Fletcher. Rather than go to the expense of redesigning older components to be lead-free, for example, manufacturers have pulled out of making them. Counterfeiters, however, have re-marked parts to match those in short supply.
Ironically, one batch of components shipped to General Dynamics was demonstrated to be full of fakes because a scan using X-ray fluorescence revealed that the supposedly military-grade parts, which are allowed to contain lead, had none of the metal present.
David Akhurst, component engineering manager at General Dynamics, said the Waste Electrical and Electronic Equipment (WEEE) directive has contributed to the supply of counterfeits. Many manufacturers ship their waste electronics to Asia for recycling. "They are removing devices from PCBs using heat guns, then repackaging them and selling them to us," he claimed.
Although many fake parts are supplied through brokers, some parts even leak into the legitimate distribution network, often because returns from customers are not screened effectively.
To combat the situation, General Dynamics, like a number of other manufacturers, set up an anti-counterfeiting plan. Staff are trained to spot fakes and report suspicious items to the component engineering teams, and all orders are traced using on-chip date codes to ensure they match the manufacturers' information.
Often, fakes can be spotted by comparing them against known good products or by looking for signs of re-marking. 'Black-topping' is a common trick to hide tampering or relabelling, but can be spotted with chemical tests or just by looking for telltale marks.
The UKEA's website will extend the internal photographic databases built by companies such as General Dynamics to the Web. Component users will be able to upload photographs and descriptions of fakes they have found to a common online database, potentially alerting others to known fakes in circulation with clues on how to spot them.
Roger Rogowski of the UKEA said component manufacturers could do more to protect themselves. Often, the package designs are not trademarked in a way that could be used by customs officials to spot fakes at ports. "The adoption of more enforceable trademarking is being considered by the European Semiconductor Industry Association anti-counterfeiting forum," Rogowski said.