Imagine the incidents such as an aircraft failing when in the air with boarded passengers, the medical equipment blurs off in the middle of the surgery, the missile misses the target and hits the own camp and a heavily invested satellite fails reaching its destiny. One of the reason for these incidents is fake parts otherwise called counterfeit part/component used in them.
The amount of loss and tragedy caused by such duplicate components is huge. The fake semiconductor chips and other electronic components are posing great challenges to the world as they have created major threat to safety, security, quality, reliability, and profitability.
The semiconductor IC parts and other electronic components need to checked throughly before purchasing them. This article educates you in buying authentic components and semiconductor chips. You will learn how the counterfeits arise, their impact and how to prevent them.
As the usage of electronic devices and equipments has increased enormously, the cost and technology of components have also varied accordingly. There is always a factor of the components becoming obsolete, expensive or hard to find due to various reasons such as demand fall, excess inventory, competitor's upper hand, technology outdates, and so on. Using the internet to surf through the grey market to procure the components is vastly utilized by many companies to meet their demands.
Few technology-aware groups have started supplying the required components using the short-cut methods by violating the land rules. These components may not meet the standard specifications. Such components predominantly relate to the obsolete or long-lead time components with a unit price below 10$.
The copycat of the original component introduced in to the market that may or may not function as intended for is termed as a fake or a counterfeit part. Counterfeit is a substitute or an unauthorized component produced without the notice of the original manufacturer.
The counterfeiter misrepresents the original supplier. Due to huge profits, the counterfeiters are found in many application domains. Counterfeits have even entered the defense/aerospace industry and medical applications.
You may ask whether there is a particular category of components affected by counterfeit. The answer is simple "no", counterfeiters have chosen all commodities of electronics, right from capacitors to diodes to memory chips to microprocessor ICs.
Counterfeiters are also improving their technique and expertise up to an extent of successfully duplicating a company itself. Technology now exists to optically copy semiconductors and make a layout design at lower cost than using previous technology. The range and the volume of counterfeit components are expected to further increase in the future.
The cloned components are discovered in a number of ways, sometimes customers return the excess inventory where portion (labels, etc.,) of these original components are utilized to fake the counterfeit components. In one of the cases, the failed component in terms of electrical specifications failure from a customer was returned to the original manufacturer and it was found that the component was not made by the original manufacturer. The obsolescence of critical components still in demand is faked most.
The cloned parts which are functional in nature create more risks and utmost care should be taken with such components during all the stages of visual and functional testing. There are wide varieties of cases encountered and for each case, the testing methodology varies. For example, the package condition and ink markings on the counterfeits are just as similar to the original.
Except for few parametric tests, the fake part passes the other basic functional tests. It becomes so difficult to identify and distinguish the original with the fake components as counterfeiters are becoming the masters of device substitutions. These fake parts are sold in secondary market. So, buying a part in the secondary market is always a risk and hence whoever chooses secondary market should use the best inspection and test methods to reduce the risk and impact.
In multinational organisation, there is a success story about how they tracked the source of a counterfeit component. A component from a reputed manufacturer had failed in the field and when investigated with the responsible representatives from design, sourcing, supply chain and the distributor/supplier, everyone was performing their task in the same way as before for many years and never had encountered any issue so far.
During the investigation, the sourcing representative had disclosed a bit of information that he, as usually, had contacted Mr.X of the reputed distributor/supplier for procuring the components. Mr.X had already left the company a while ago, and was engaged with the counterfeiters. So, taking it by granted, the sourcing representative had bought the components from Mr.X, an ex-employee of a reputed supplier. Here, the biggest un-noticed fact is that the reputation of Mr.X was taken for granted and the entire episode had evolved.
So, the lesson learnt here is that even though we are good at business relationship and reputations, there are chances of getting faked. So, a habit should be developed by the representatives involved in supply chain and distributor/supplier to update and communicate their correct contact details on a timely basis.
7. The green or environmental compliance regulations such as RoHS, REACH, etc., create demand for non-RoHS components for use in applications which are exempted from these regulations.
The uncertain and unstable market today in addition to the risks posed by counterfeits, obsolescence and coping up with the technology advancements is the real challenge to be faced by the companies today. Combating against the fake parts is very much essential to protect the company's supply chain, the products and the brand image. Few general tips are presented below:
1. First precaution is to control the source and the inventory (the "supply chain") - by properly maintaining, updating and reviewing the information as said in the introductory module.
2. Keep a better watch on life cycle of each component. Be ready with multiple alternate components and sources in case of the component nearing to its end-of-life (EOL). In case of single-source components, better have enough stock in-hand, even though it adds to the sleeping budget.
3. Prefer purchasing the components from the manufacturer directly as much as possible. If it is not viable, then approach the franchised distributors and qualified independent distributors. Proactively, get the contact details and addresses of the distributors from the original manufacturer directly or get them confirmed. Maintaining and assessing the potential suppliers can help a lot.
4. Adopt a thorough screening of components and perform inspections with sophisticated instruments like X-ray fluorescence (XRF), digital X-ray instruments, microscopes, etc., for destructive of non-destructive methods. After all, "it's better and smarter to prevent than repair…!"
5. Check for the unnatural language, logos, fonts of the printed text, layout of the information, and compare the product information against the original purchase order.
6. Gather, update and store what codes (marking, lot, date, shipment, bar, serial, etc.,) are to be inspected and confirmed them from each supplier/distributor independently. Even though the extra time is consumed here, it saves a lot of time in the next stages and more importantly the customers and the brand image are not hit.
7. Implement tracking system inside the supply chain such that every component is traced back to their purchase history, representatives involved and the date stamp.
8. Look for distributor's/supplier's certification, their revenue and history. Probably the preferred supplier's list, if maintained, can provide more details and pointers to scrutinize the authenticity.
9. If feasible, subscribe to the industry's available databases who maintain the overall reports and cases of counterfeits.
10. Implement stronger purchasing contracts that specifically deal with the clause for counterfeits and making the suppliers viable for product impoundment and financial losses.
11. Report the counterfeits to other buyers, stakeholders and criminal investigation authorities (GIDEP, ERAI). Do not return the counterfeit components to the seller.
In a nut shell, the companies can form a team comprised of members from every department to drive the organisational level plan and strategy. Also, the team should be equipped with better trainings and awareness. It's not one team's responsibility, because each sector of the supply chain faces a different crisis and situations and a best practise can be shared and implemented across the entire organisation effectively.