Integrators must take measures to protect themselves from counterfeit electronic parts

June 1, 2006
Once the bane of the U.S. Treasury, counterfeiting has now spread, from con artists using ink-jet printers to run off phony $20 bills, to the manufacture of fake Rolex watches, bogus designer clothing, and now, fraudulent electronic components.

By Allan Whitlow

Once the bane of the U.S. Treasury, counterfeiting has now spread, from con artists using ink-jet printers to run off phony $20 bills, to the manufacture of fake Rolex watches, bogus designer clothing, and now, fraudulent electronic components.

Counterfeit electronic parts, which have come to the forefront in the electronics manufacturing industry in recent months, are particularly vexing to high-reliability manufacturers of military and aerospace products where component failure is not an option.

Counterfeiters have seized on the existence of a “gray market” of independent distributors and parts brokers, coupled with a shortage of genuine parts from tier-1 manufacturers, to push their artificial products. The demand for integrated circuit chips (ICs) and capacitors has created big markets for counterfeiters. Equally lucrative markets exist for amplifiers, batteries, connectors, and power-management devices, among other items. Regrettably, where there is a sufficient market for a component, counterfeiters most likely will seize the opportunity to supply a phony version.

Determining whether a part is real or phony is not always easy, however. Increasingly, military and aerospace manufacturers are turning to outside test facilities to screen components obtained from open-market sources prior to manufacturing. Screening procedures fall into two major categories: decapping and testing.

Decapping is the tester’s equivalent of a medical examiner’s autopsy; the suspect part is opened to reveal what is inside. By examining a part’s innards, test engineers often can determine whether the part is genuine.

In the past, opening a metal or ceramic capacitor, for example, was a fairly simple process, yet the advent of plastic components has made decapping more difficult. Today parts inspections require highly specialized equipment to gradually peel away exteriors of tiny components as small as 0.002 inches in diameter. Today’s modern test facilities use jet-etch devices to spray controlled streams of hot acid, usually sulfuric or nitric, to etch away the outer plastic. Optical microscopes ranging from 50× to 500× magnification then help experts look for part numbers, logos, and other information that may validate the component.

Testing of components is even more complex. The part not only must work, but it also must perform to the same rigorous standards applied to the part it purports to be. In the case of high-reliability military and aerospace components, the testing is intense. Testing does not determine whether the part is genuine-only that it performs to required specifications. There is very little chance a counterfeit part will survive a full Mil Standard 883 screening and qualification-a battery of tests that takes 26 weeks to complete.

Perfect to faulty

The quality of counterfeit parts ranges from nearly perfect to outrageously faulty. In some instances, absolute determinations cannot be made because the suspect parts closely resemble the genuine article in appearance and performance. In other cases, the parts are not even close. Once uncapped, incorrect or missing parts numbers, and, in some cases, entire dies (the working parts of a component) are discovered missing.

Counterfeit parts that do perform, however, may not perform as long as expected. While similar, a part made for the civilian version of a popular military vehicle, for example, cannot be expected to perform as long as the part specified in its military counterpart.

Counterfeit components fall into two general categories: remarked and manufactured. Remarked counterfeits include parts that have been relabeled with logos, part numbers, and other information, making them appear genuine. The remarked part may or may not be a close match to the component it purports to be. Remarked items can include failed parts that have been scrapped by legitimate makers, salvaged parts from scrapped circuit boards and product over-runs, which are especially common.

Product overruns occur when legitimate manufacturers complete an authorized production of, say, 10,000 integrated-circuit (IC) chips. At the end of the authorized run, the company manufactures an extra 5,000 chips. The first 10,000 chips are delivered to the customer and the overrun of 5,000 sold on the gray market at discounted prices, usually through a second party known as packaging contractor and unknown to the original customer.

Manufactured counterfeits are components that have been specifically created to fill a supply void. As with remarked items, they may or may not be close matches to the originals. Neither remarked nor manufactured counterfeits have undergone the legitimate manufacturer’s quality processes, thus posing reliability risks. These parts can work perfectly, imperfectly, or not at all.

Counterfeiting takes place in the United States, the Far East, and elsewhere. China is a major source of counterfeit components, a result of lax enforcement of the laws regarding counterfeiting and intellectual property (IP) theft and the proliferation of its electronics and semiconductor-manufacturing base. As its skill at creating genuine devices increases, so does the opportunity to create counterfeits.

Who is vulnerable?

Companies that are particularly vulnerable to counterfeiters are those whose officials thought they would be able to obtain high-reliability components from established manufacturers, only to find the parts they need have suddenly been dropped from production in favor of more lucrative consumer quality components made to less rigorous standards.

Faced with the expensive prospect of redesigning their product or looking elsewhere for parts, manufacturers often chose the latter, going to the open market and nonfranchised distributors to locate the components needed to complete their contracts. The parts they locate can be legitimate or fake.

Despite their best intentions, companies can find themselves steeped in counterfeit parts if they ignore some common-sense precautions.

First, avoid counterfeiters at the source. Try to purchase component parts only from manufacturers and authorized distributors.

When you must purchase parts on the open market from independent distributors or “brokers,” demand the necessary paperwork that will identify the manufacturing source. If the broker balks, consider that a warning to go elsewhere.

Do not pay for merchandise until you have received and verified it. Ask for samples, and then test them.

Know your independent distributors and how they operate. Work with them to put processes into place that protect both of you from developing reputations as either suppliers or users of counterfeit parts.

Stick with suppliers you know. If you have had success with a broker in the past, go back to that broker when you cannot purchase from manufacturers or authorized distributors.

Align your design and manufacturing schedules to match the availability of components. Your product’s lifecycle is only as long as the lifecycle of the components within it.

When subcontracting, validate your vendor’s sources by auditing their methodologies and purchasing records.

Finally, screen, rescreen, and screen again. Only through aggressive watchfulness and the development of a rigorous screening program can you be assured of preventing-or at least minimizing-the appearance of counterfeit parts in your supply chain.

Allan Whitlow is senior production advisor for Sypris Test & Measurement ( in Orlando, Fla. He is experienced in the detection of counterfeit parts on a variety of electronic components in the aerospace and military industries.

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