Black & Grey Markets

Mitigating the risk of counterfeit components

Author: Victor Meijers, Sr Vice President, ECIA

As electronic functionality and internet connectivity reaches every aspect of human activity, the consequences of counterfeit and unauthorised components in the electronics manufacturing supply chain have become much more serious. Whether it’s a 20-year-old fan sold as new, a relabeled wire harness or a used chip pried off a discarded PCB and sold as new, it’s never been more important for both original component manufacturers (OCMs) and their customers to engage in risk mitigating sourcing practices to prevent these bad parts from being used in electronic products.

In the past, when electronics were only your computer, your television, or your mobile phone, if something went wrong because of a faulty component, you could safely walk away from the problem. Now if your airplane, your automobile, your manufacturing line, or your country’s military is using equipment that has fake components, the effects can be catastrophic. There are also privacy and security concerns with IoT devices in smart homes. Who wants spyware in their baby monitor?

Costs and consequences of unauthorised components

First, a definition: a counterfeit component is an unauthorised part, that does not conform to Original Component Manufacturer (OCM) design, model, or performance standards, is not produced by the OCM, is out-of-specification, or defective; or a used OCM product sold as new, has incorrect or false markings or documentation, or is produced or distributed in violation of intellectual property rights, copyrights, or trademark laws.

OCMs are developing increasingly sophisticated measures to detect and prevent the sale of counterfeit parts. Working with their authorised component sales channel partners, they create a secure document trail and a rigorous process for tracking the provenance of each component they release. Standards such as AS6496A, originally developed for the aerospace industry, detail an anti-counterfeit strategy that is being adopted by other industries.

As anti-counterfeiting measures get better, however, the counterfeiters get bolder. In addition to remarking recycled components, new components can be remarked to change their designation. Consumer-grade ICs can be remarked for use in automobiles, which may compromise the safety of drivers, passengers, and pedestrians. In one example, a suspected counterfeiter recently tried to sell consumer Intel microprocessor chips to undercover agents as military-grade for use in helicopters.

All kinds of components are vulnerable to counterfeiters, although the common practices for obtaining them vary. Counterfeit semiconductors typically come from excess inventory sold and resold by brokers and independents; or they come from previously used parts salvaged from scrapped assemblies; from manufacturer rejects or cloned IP made into ICs.

But interconnect, passive, and electro-mechanical components are also vulnerable to counterfeiters. ebm-pabst recently reported on an elaborate scheme based in China selling 20-year-old fans recovered from abandoned factories as new.

Murata has posted warnings to customers that unauthorised distributors are selling counterfeits by forging a Murata letter of authorisation, falsely stating they are authorised distributors. Buying from online websites can be even more dangerous because few online platforms authenticate claims and documents about the source of the components.

Avoiding counterfeit parts

The best practice for mitigating the risk of unauthorised parts is simple: buy through the authorised channel. OCMs and their authorised distributors are very aware of the many techniques used to sell fakes, and they invest heavily in mitigation measures. Component customers in the design community and in the electronics manufacturing services (EMS) industry do not have the knowledge and expertise to tackle this growing and multi-faceted problem on their own.

What is the authorised channel for electronic components? Component manufacturers sell to original equipment manufacturers (OEMs) and their electronics manufacturing services (EMS) partners either directly or through industrial distributors, and their sales forces are frequently augmented by independent manufacturer representatives.  Because of the sensitivity of many electronic applications and the value of the components, these trusted relationships and channel partners are the best guard against counterfeit components.

What is an authorised distributor? A common misperception is the authorisation applies to the distributor. However, it’s a designation made at the product level. In other words, a distributor is authorised by a manufacturer for a certain set of products; sometimes it’s their entire product line, sometimes it’s a sub-brand in certain territories. Right now, there are distributors that are authorised for a complete product line globally, but it also goes all the way down to specific countries, and a specific subset of products in a specific area.

As mentioned, distributors are governed by anti-counterfeiting standards such as SAE’s AS6496. The standard sets forth the requirements for mitigating counterfeit products in the authorised distribution supply chain by distributors performing authorised distribution. It is used by aerospace companies to reduce the risk of counterfeit electronic parts entering the aerospace supply chain, but customers in other industries are encouraged to use the standard as an anti-counterfeiting model.

Internet aggregators of components have become the primary vehicle for searching for and purchasing of electronic components in the past decade or so. The ECIA (Electronic Component Industry Association) hosts an aggregator search engine populated by parts from authorised distributors called (formerly known as Using this platform is the best way to ensure the authenticity of the parts.

Launched in 2010 in the Americas, was created by ECIA in collaboration with a core group of distributor members to support the authorised electronic components industry by giving users access to aggregated price and availability data for genuine parts from only authorised sources.

In 2016, the site was expanded to become truly global, supporting the local languages and currencies of each of the key markets around the world. For the last decade, has been recognised in the Americas as the trusted source for authorised inventory for the electronic components industry.

When inventory aggregation sites first emerged, no distinction was made between authorised distributors and non-authorised sources. This opened users of these sites to the risk of unknowingly procuring components that were counterfeit or had not been handled or stored properly, among other risks. was developed for the express purpose of giving users confidence they were sourcing genuine electronic components, fully warrantied and supported by the manufacturers from only their authorised distributors.

While some inventory aggregation sites now indicate when a distributor claims to be authorised for a given product, only requires actual proof of authorisation. This proof must be provided for each region a distributor engages in on These proof documents are stored in the system and periodically re-verified. Through the Manufacturer Portal on, manufacturers can even set the authorisation statuses for distributors directly themselves. This unique feature ensures the authorisation is up to date, accurate, and product specific. Types of documents used to verify the authenticity of the part include the actual franchise agreement between the distributor and the OCM.

All these safeguards ensure that components purchased through are genuine. This is the best way for companies to protect themselves and their brands.

This article originally appeared in the February issue of Procurement Pro.