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Counterfeit Components Market on the Rise

“Necessity is the mother of all invention”.

Unfortunately, sometimes these attempts to get creative are not in the best interest of the market (and other times fraudulent and illegal),  as evidenced by the ever increasing problem with counterfeit parts.

Industry reports indicate that the current rise in counterfeiting costs consumer and industrial enterprises up to USD 250 billion annually. However, the actual amount could be substantially higher given the large number of counterfeits that go undetected. Furthermore, analysts believe that up to 15% of all spare parts and replacement parts acquired by the Pentagon are fake, making it clear that not only small businesses are at risk ( ).

Earlier in the year, the Pentagon ran into problems concerning magnets that didn’t adhere to the qualities they needed, and while a waiver was eventually granted, this issues still managed to gum the processes concerning the F-35

Via The Federal Times, featuring Nick Martin, director of the Pentagon’s in-house semiconductor supplier, the Defense Microelectronics Activity: “Now, with it often taking as long as two years to obtain some components from approved sources, electronics manufacturers find themselves facing fewer options. The most common counterfeits are not malicious, Martin said, and might simply have had their serial numbers altered to disguise that they’re not suited for military purposes.

Our DoD weapons systems are long in the tooth in terms of time in the field, and we need to make sure that there’s specific reliability requirements for the components that we put into them,” Martin said. “Counterfeits or even cloned components will compromise the reliability” of equipment.”

Even Mercedes-Benz is affected, stating that “… the number of seized products rose by some 6% from the previous year.” ( )

So what can be done?  

Most industry experts expect a rise in these issues as supply chains become strained.  That being said, this ongoing problem is why we have quality standards to begin with.  Thoroughly testing parts, and working with suppliers and distributors that adhere to both the AS9120 and AS6081, are crucial steps in keeping your company out of hot water.

Making sure that your distributor is part of The Government-Industry Data Exchange Program or, GIDEP, is also wise.  As the saying goes, “it takes a village” and members of GIDEP have committed themselves to being part of the solution.

Feel free to schedule a free consultation with Legacy Components and find out how we can save you money and reduce your stress at the same time: