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Reports of Counterfeit Parts Increase 4X Since 2009

By - Source: IHS | B 19 comments

According to IHS, the global supply chain reported 1,363 verified counterfeit-part cases in 2011, up from just from 324 in 2009. It was the first time that more than 1,000 incidents were recorded in a single year. Over the past ten years, counterfeiting has increased by a factor of 700.

According to IHS, the bulk of these fake products were reported by military and aerospace electronics firms in the U.S.

"The counterfeit issue is serious, it’s growing and it’s a major problem for electronics makers - especially military and aerospace companies," said Rory King, a director for IHS' supply chain product marketing.

"The problem has grown increasingly hard to ignore, as reports of counterfeits have risen exponentially and most companies lack the awareness and capability to effectively detect and mitigate the growing problem. Now that United States legislation will hold defense suppliers accountable for counterfeit issues, access to these incident data becomes a critical decision-support capability for business systems."

The market research firm said that the fact that military and aerospace industries are especially affected means these fake parts are putting human lives at risk. Counterfeit parts are typically produced with "cheap substitutes or salvaged waste components that fail to meet strict military and aerospace specifications," IHS said. There is also speculation that some counterfeit devices could be carrying Trojans, which creates a national security problem.

Avoiding exposure to counterfeit products is a massive task, but the 2012 U.S. National Defense Authorization Act (NDAA) was signed into law on December 31, 2011, which requires members of the defense supply chain implement certain counterfeit mitigation procedures in place.

According to IHS, 0.5 to 5 percent of the parts purchased for a military/defense program may be counterfeit parts.

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  • 18 Hide
    chomlee , February 16, 2012 12:14 PM
    Is it me or does this article seem to be a little vague in the details. What parts are being counterfieted? Who's doing the counterfieting? What problems is it creating? I hate to be one of those critics but because there are no details/examples, I just dont understand the issue.
Other Comments
  • 8 Hide
    LORD_ORION , February 16, 2012 11:25 AM
    I wonder where these counterfeit parts are produced.
  • 2 Hide
    Lutfij , February 16, 2012 11:58 AM
    def not in (mainland) china
  • 8 Hide
    digiex , February 16, 2012 11:58 AM
    Where else,

    clue...

    ...they have a wall that can be seen in space.
  • 18 Hide
    chomlee , February 16, 2012 12:14 PM
    Is it me or does this article seem to be a little vague in the details. What parts are being counterfieted? Who's doing the counterfieting? What problems is it creating? I hate to be one of those critics but because there are no details/examples, I just dont understand the issue.
  • 8 Hide
    tical2399 , February 16, 2012 12:20 PM
    chomleeIs it me or does this article seem to be a little vague in the details. What parts are being counterfieted? Who's doing the counterfieting? What problems is it creating? I hate to be one of those critics but because there are no details/examples, I just dont understand the issue.


    Agreed, this article basically says nothing at all.
  • 0 Hide
    epdm2be , February 16, 2012 12:23 PM
    The car industry has been using 'counterfieting parts' for ages. They're called replica's. It's sometimes your only option to revive that classic car that's been broken down. As the original manufacturer forces you to buy new stuff every year and hence stop to make replacement parts for that beloved oldtimer that can't part with.

    Now I wouldn't want to sit in a plane botched together by cheap cwappy countewfeit pawts. Take Off, might get a new meaning :-)
  • 6 Hide
    jabliese , February 16, 2012 12:38 PM
    Totally different problem, epdm2be. Think bad capacitors.
  • 0 Hide
    three0duster , February 16, 2012 12:42 PM
    I'd be willing to bet it deals with electronics. They (I wonder where) make some very convincing counterfeit parts. They work very similar up until longevity or quality are needed.
  • 0 Hide
    wiyosaya , February 16, 2012 1:03 PM
    chomleeIs it me or does this article seem to be a little vague in the details. What parts are being counterfieted? Who's doing the counterfieting? What problems is it creating? I hate to be one of those critics but because there are no details/examples, I just dont understand the issue.

    It would certainly be nice to know this so that people like us Tom's readers could be on the lookout.

    This sort of thing has not happened in years. In the early 90's (gosh, I feel like an old man :) ), this was relatively rampant with CPUs. I forget what happened to stem the tide, however, the number of counterfeit CPUs on the market dropped significantly.
  • 2 Hide
    wolfram23 , February 16, 2012 1:20 PM
    Just blame the pirates. It's always their fault.
  • 1 Hide
    maxinexus , February 16, 2012 1:34 PM
    It is like buying Adidas sneakers but when you look closer it said Adibas lol
  • 0 Hide
    sporkimus , February 16, 2012 2:15 PM
    Ok... so we know that stuff is being counterfeited... but we don't know what exactly is being counterfeited, we don't know how exactly this is impacting the market and we don't know who exactly is doing the counterfeiting. This article totally makes sense now!
  • 4 Hide
    matt_b , February 16, 2012 3:00 PM
    epdm2beThe car industry has been using 'counterfieting parts' for ages. They're called replica's. It's sometimes your only option to revive that classic car that's been broken down.

    Totally different. This would most likely be more like I manufacturer a very cheap PSU (think eBay Chinese quality), paint it the the right colors, slap an official looking Seaonic label on it, then sell it to you for $150 when I have like less than $20 in parts invested into it. You're buying from me, what appears at first glance to be a high quality Seasonic unit - until you test it out. Reproductions are just that, and labeled so. If I went out and bought new fenders for my 67' Mustang and they said OEM Ford on them with some numbers that look legit, but were not, then we're in the same boat. The difference between the official and reproductions are night and day though, too easy to tell the difference. I doubt a knockoff could get away with it - but you're referring to replicas/reproductions.
  • -1 Hide
    freggo , February 16, 2012 3:37 PM
    digiexWhere else, clue......they have a wall that can be seen in space.


    Just a myth actually. I can NOT bee seen from the ISS for example by the naked eye.
  • 0 Hide
    starcore , February 16, 2012 4:57 PM
    That is insane, i wonder how they will resolve the issue
  • 1 Hide
    juncture , February 16, 2012 7:08 PM
    digiexWhere else, clue......they have a wall that can be seen in space.

    That clue is pure myth, the china wall cannot be seen from space, although it's very long, it's only 30 feet wide at most. If you could see it from space, you would be able to see most streets, roads, interstates,highways from space which you can't.
  • 1 Hide
    A Bad Day , February 16, 2012 8:09 PM
    "Sir, three Airbus A380s crash landed over the Rocky Mountains. Very few survivors."

    "Wha?"

    "According to early investigations, apparently the memory chips in computers were faulty..."
  • 1 Hide
    sewalk , February 17, 2012 12:34 AM
    epdm2beThe car industry has been using 'counterfieting parts' for ages. They're called replica's.

    You're obviously quite confused. Replica or reproduction parts are not counterfeits if they are plainly marked as such and the use of repro parts is a commonly accepted practice in the auto repair industry. Counterfeiting involves creating something, usually of substantially reduced quality, and representing it as authentic and original.
  • -1 Hide
    Anonymous , February 17, 2012 7:23 AM
    The real issue with these "counterfeits" isn't that they're fake or even replicas, but rather, instead of being explicitly "new" parts, they are salvaged but still in working condition. It's one thing to produce fake chips (since it's very hard), and it's another to misrepresent the condition of goods (say it's new when it's used/salvaged).