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.