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Safeguard Your Business against Counterfeit Parts
December 31, 1969 |Estimated reading time: 3 minutes
Counterfeit parts have become highly prevalent in the electronic component industry within the last five years. According to National Electronic Distributors Association (NEDA), counterfeit parts now comprise between 5% and 25% of all available parts and cost the industry as much as $100 billion per year. Kenneth Bradley, Allied Electronics, discusses why devices are counterfeited and what distributors can do to shut them out.
The estimated average cost to replace just one counterfeit part in one product after it ships is $2,500, according to NEDA. No business wants to buy or use counterfeit parts. These components can cause production problems and damage your company’s reputation. It is in a company’s best interest to know about the risk of counterfeit devices and how to safeguard itself against buying them.
Electronic components are often counterfeited because of their high demand. Some counterfeit parts consist of fake parts designed by an establishment or company to appear and be sold as an original manufactured part. Other counterfeit parts are actually scrap products that have been remarked, or de-soldered and labeled to appear new.
Because electronic component parts are more prone to obsolescence, have quicker turnover, and — therefore — produce more scrap than other products, they are often targeted by counterfeiters. Technological advances have also helped compound the problem of counterfeit parts, as counterfeiters have gotten better at disguising fake parts.
Figure 1. Semiconductor devices, which have oft been subjected to counterfeiting.
Today, all electronic components are susceptible to counterfeiting. In the past, high-value board-level components, such as semiconductors, were most frequently targeted by counterfeiters. However, counterfeiters have begun to target switches, connectors, and resistors, among other parts.
Figure 2. Inexpensive passives are now also being counterfeited.
According to NEDA, the primary entry of counterfeit electronic parts is purchasing from non-authorized sources, such as brokers and unauthorized distributors. However, authorized distributors can sometimes receive counterfeit parts when they accept returns from OEMs and electronics manufacturing services providers.
For this reason, NEDA recently released new guidelines that call for instituting controls in the form of return policies, inspections, and verifications. These safeguards help to ensure the integrity of the authorized supply chain and keep it as an unlikely source of counterfeit parts.
Distributors have return policies in place to safeguard against counterfeit parts. In addition to visual inspection, distributors use various other methods to detect counterfeit parts. For example, purchase orders and date and lot codes can be used to verify that the part is the same product that was originally sold. Some distributors may also employ an X-ray machine process for component analysis.
The best protection against buying counterfeit parts is to always buy from an authorized source. An authorized distributor will use best practices as safeguards for buyers. Authorized distributors implement thorough and stringent screening of suppliers and their processes, thereby reducing the risk of counterfeiting.
Buyers that want fully warranted electronic components and reliable safeguards against counterfeit parts should use an authorized distributor. For more information on Supplier Authorized Distributors, visit NEDA online at www.nedassoc.org.
REFERENCES:
1. “There’s No Disguising It - We Need Your Help to Fight Counterfeit Parts,” NEDA, www.nedassoc.org2. “NEDA Guidelines for Product Returns,” NEDA, September 2009, http://www.nedassoc.org/documents/NIGP113_001.pdf
Kenneth Bradley, director of supply chain, Allied Electronics, may be contacted at (800) 433-5700; www.alliedelec.com
Read More About Counterfeit Electronics:Finding and Preventing Counterfeit Components in the SMT Supply Chain
Read Anti-Counterfeiting Protective Measures in the May/June issue of SMT Subscribe Here
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