Chip Shortage Persists: Counterfeiters Rejoice!

As the chip shortage took hold we started sounding the alarm about the risks of counterfeit chips corrupting inventories.

Chip Shortage Persists: Counterfeiters Rejoice!

At the risk of saying “we told you so,” as the chip shortage took hold we started sounding the alarm about the risks of counterfeit chips corrupting inventories. Reports like Europlo’s recent Intellectual Property Crime Threat Assessment suggest that the risks are serious and aren’t likely to subside anytime soon.  Creative Electron helped pioneer the use of X-ray inspection in combating counterfeit electronics components, and with the chip shortage persisting, it’s time to revisit some best practices.

  • Counterfeit Semiconductors are a real threat
  • Screening protects distributors, manufacturers, and consumers
  • Non-destructive X-ray inspects 100% of component inventories

The threat is real (and persistent)

We use the term counterfeit to encompass fiscal counterfeits, misrepresented, recycled (refurbished), and substandard chips as well as fraud in the distribution of chips.  Point being, there are a lot of landmines out there.  If a website misrepresenting component availability results in wire fraud, that can be financially damaging, and it’s happening a lot these days.  If actual fake chips make it into your inventory and then products, the harm can be immeasurable, especially in high reliability products like automobiles and aircraft.

The Europol report characterizes the problem like this: “Disruptions in supply chains and the possible introduction of counterfeit components has the potential to cause serious failures in critical infrastructures. Semiconductors are an integral part of critical systems used in the healthcare sector, transport, defense, and trade. The risk of privately used electronic devices being affected is also high. Additionally, counterfeit electronic devices may also feature malware and other harmful software, adding the risk of data theft.”

Screen for vendors who screen

You most likely already have strict protocols for approving new vendors.  It’s especially important now that you stick to you guns on these rules.  While there may be pressure to procure scarcely available chips, much of the fraud associated with the current shortages involve organizations relaxing or abandoning their best practices.  If you do find  yourself needing to flex the rules, engage organizations like IDEA or ERAI to help screen potential suppliers.  IDEA is an association of top quality independent component distributors who’s members develop and practice industry leading standards for counterfeit screening.  ERAI maintains the largest database of semiconductor fraud reporting, and can help you find top notch suppliers.

Non-destructive, 100% inspection At Creative Electron, we’ve been laser focused on the semiconductor shortage.  We’ve seen the fallout of previous shortages and the incentives they create for counterfeiters.  And we’ve helped develop X-ray inspection protocols and tools specifically for counterfeit chip interdiction. By way of example, check our our TruView™ Prime R in the short video below.   X-ray inspection is unique in it’s capability to screen 100% of components non-destructively.   For more detail on how X-ray is used to prevent such fraud, check out our earlier post including 10 tips for avoiding counterfeits.

TruView™ Prime R Video

Would you like to learn more about how X-ray inspection tools can help you through the chip shortage?  We’d love to share more, and encourage you to reach out.

October 10, 2022

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