What is Semiconductor Counterfeiting

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Have you ever gotten that flyer for free e-waste pick up and thought to yourself how wonderful it is that someone wants to help you free up space by taking away that pile of old electronic devices that were sitting in your garage? To think, that you don’t have to spend your Saturday afternoon and gas dragging that junk away. Sure, there is a good feeling about being environmentally conscious, but do you know what happens to your items after they have been hauled away to be “recycled”?

Not unlike stolen cars that end up in a seedy neighborhood chop shop, old and used electronic devices are dissected for their semiconductor components. These components are then re-marked, or counterfeited, to pass off as new or original parts. The parts then get bought and sold through a network of brokers as either independent parts or in sub-assemblies to be incorporated into larger products. While original component manufactures (OCM) have extensive testing for their components before hitting the market, there is relatively little or none done on counterfeit parts which allows for greater profits and thus the appeal to create and traffic them.  The result of a product containing these components can be anywhere from a diminished lifespan to the risk of failure that can be costly or fatal depending on the product application.

In August 2013, the Semiconductor Industry Association (SIA) Anti-Counterfeiting Task Force (ACTF), released a whitepaper in regards to this dilemma titled “Winning the Battle Against Counterfeit Semiconductor Products”. The ACTF is continuously working to diminish the supply and demand for these products.

In January 2010, the Bureau of Industry Security, which is part of the Department of Commerce, published a report that defined a counterfeit electronic part as “one that is not genuine because it: is an unauthorized copy; does not conform to original OCM design, model, or performance standards; is not produced by the OCM or is produced by unauthorized contractors; is an off-specification, defective, or used OCM product sold as “new” or “working”; or has incorrect or false markings or documentation, or both.”

[i] While the practice of counterfeiting semiconductor components is not really new, there have been four major changes since the mid-1990s that have elevated the practice:

  • The dot-com boom in the late 1990s and periods of high semiconductor demand following, created long lead times and rising prices for semiconductor components.
  • Increased environmental awareness led to electronic waste no longer ending up in landfills and instead being “recycled”.
  • Tens of Thousands of internet sites for brokers to buy and sell semiconductor products worldwide outside of authorized distributors and resellers.
  • Component purchasers increasingly focused on price and availability. The components are ordered from the internet sites as listed above due to their low prices and quick delivery.

While in the 1970s and 1980s, there were negligible counterfeit semiconductors in the supply chain, beginning in the late 1990s, the combination of the above developments allowed counterfeit semiconductors to proliferate.[ii]

While there are testing procedures in place to look for these components, counterfeiters have managed to get through these processes by becoming familiar with the sampling protocols. Lab testing of every component would be too costly and therefore samples are pulled for sample testing. As the whitepaper also explains, counterfeiters use this knowledge to “seed” legitimate units at the beginning and end of tubes and reels so the easily sampled parts are tested and pass. Customs is another area where the sheer volume of material that is shipped through does not get properly inspected due in part to the lacks of customs agents and protocols. Companies within the industry can help curb these problems by ensuring that the semiconductor components they buy are done exclusively through authorized sources such as distributors directly linked to the manufacture. As consumers, we can contribute by handling the way we dispose of our electronics. I would not say that all recyclers are unethical, but I for one will be doing a little dismantling before heading down to the e-waste recycler next time.


[i] “Defense Industrial Base Assessment: Counterfeit Electronics,” published by the Department of Commerce’s Bureau of Industry and Security, January 2010

[ii] “Winning the Battle Against Counterfeit Semiconductor Products-SIA: August 2013