Report: Counterfeit electronic parts multiplying at record rate

The number of reported counterfeit electronic component parts this year are maintaining the record pace set in 2011, according to IHS iSuppli.
Written by Rachel King, Contributor

The number of reported counterfeit electronic component parts continues to rise at alarming rate as it remains on track with the record set in 2011, according to market intelligence firm IHS iSuppli.

In February, IHS reported that there were a reported 1,363 separate counterfeit-part incidents worldwide, up from 324 in 2009.

Now, IHS analysts hint that the total number of reported incidents in 2012 could be higher based on the fact that counterfeit incident reports from the beginning of the year through the end of August 2012 averaged 107.3 per month -- up slightly from 107.1 in 2011.

It's also important to note the actual number of counterfeit electronics parts worldwide is likely unverifiable. Analysts explained that IHS's estimates are "conservative because purchased parts reflect only a subset of all reported incidents."

In May, IHS analysts also estimated the total count of reported incidents for counterfeited parts came out to roughly 12 million over the last five to six years, breaking down to one counterfeit part discovered every 15 seconds.

Rory King, director of supply chain product marketing at IHS, continued further in the report that counterfeits propose a severe risk to not only the electronic supply chain but also the aerospace and defense industries:

Each month that passes, more than a hundred counterfeit incidents comprised of thousands of suspect parts are reported. That’s why the spotlight is shining squarely on tighter policies and procedures aimed at counterfeit detection and avoidance. The good news from all this attention is that an increasing number of supply chain participant companies are joining credible anti-counterfeiting organizations like ERAI – exclusive partner to IHS and an organization that monitors, investigates, and reports on counterfeit electronic components – and filing a greater number of reports that then serve as proactive alerts to others in the supply chain of real counterfeits in circulation.

Earlier this year, the U.S. Department of Defense took new action against counterfeit electronics components, which has the potential to affect (either directly or indirectly) 362 non-U.S. companies involved with the international tech supply chain worldwide.

In Tuesday's report, IHS cited that the DoD will issue an update to these regulations on Wednesday, October 3.

Editorial standards