The Rising Threat of Counterfeit and Nonconforming Parts

Counterfeit and nonconforming parts in the SMT industry pose a significant threat to the integrity and reliability of electronic products. The ERAI 2022 Annual Report reveals a marked increase in the number of reported counterfeit and nonconforming parts, with 768 parts reported in total. This represents a 35% increase over the previous year, despite global semiconductor sales remaining flat. The distribution of the components most commonly counterfeited remained unchanged compared to the last 5 and 10 years, with analog ICs, programmable logic ICs, and microprocessor ICs remaining the most targeted component types. However, the spike in capacitor counterfeiting observed during the last 5 years has ended, and the numbers of reported capacitors have returned to pre-spike levels.

One of the most concerning findings of the report is that the majority of the reported parts (80.5%) were new occurrences that had not previously been reported to ERAI. This indicates that organizations must be extra vigilant when sourcing parts, as previously unreported counterfeit parts are constantly entering the electronics supply chain, and the threat of encountering one of these parts remains very high. Reporting suspect/counterfeit parts is a crucial step in counterfeit avoidance, and all companies should report suspicious parts to ERAI to ensure that all organizations in the electronics industry are aware of potential threats.

The report also reveals that the largest segments of reporting organizations consist of independent distributors and test labs. Manufacturers, Authorized Distributors, and “Others” were collectively responsible for only 6.1% of reported parts. This suggests that more needs to be done by manufacturers and authorized distributors to ensure the integrity and reliability of their supply chains. It also highlights the importance of due diligence when choosing a supplier. Organizations should work only with suppliers who can demonstrate that they have robust quality control processes in place and can provide traceability for their components. By taking a proactive approach to counterfeit avoidance, organizations can help to ensure the integrity and reliability of their electronic products, and protect their customers from the potentially devastating consequences of using counterfeit and nonconforming parts.