How to avoid buying counterfeit parts

Taiwan Semiconductor’s director of field applications engineering, Kevin Parmenter

Taiwan Semiconductor’s director of field applications engineering, Kevin Parmenter, helps purchasing professionals avoid buying counterfeit parts by highlighting the red flags.

Electronic component lead times rise and fall as industry reacts to changing market conditions. Covid is a dramatic example of how demand for laptops and tablets rapidly increased causing shortfalls in semiconductors. Semiconductor manufacturers redoubled efforts to supply these parts by reallocating fab capacity. The result was the shortage of automotive grade parts that left manufacturers with a huge inventory of cars and trucks with no brains.

To keep production running, buyers sometimes take extraordinary measures to secure the needed components, opening the door to unscrupulous outfits offering counterfeit parts. No one knows how big the counterfeit electronic components problem is but we do know it’s more prevalent than ever.

Counterfeiters and brokers are getting more sophisticated. What components are counterfeited? Semiconductors, capacitors, connectors, anything and everything.

Parts can be incorrect but marked with information the buyer is looking for. Alternatively, they can have no die, the wrong die or might even be ‘reject’ parts from the right supplier. Counterfeiters sometimes place real parts on the start of the reel—ones that might be inspected— and fill the remaining reel with bogus parts.

Many people don’t appreciate buyers of counterfeit products are not immune to legal exposure. In most countries, it’s illegal to possess counterfeit products and entities can be sued because they bought and/or possess the counterfeit products. Laws and recourse differ. In some countries, it seems as if counterfeiting is treated as an honorable profession. All considered, it’s odd we don’t hear more about the problem.

Purchasing agents need to deal with shortages from time-to-time but there are some basic red flags to watch for to avoid buying bogus parts.

Red flag 1: Touting perfect inventory quantities. Be suspect if the number of parts that the source has in stock is coincidentally the same as the amount needed. Also, if it seems no one else has the parts except this outfit.

Red flag 2: Language issues. As opposed to most mainstream part makers, counterfeiters often do not have the resources to rely on personnel where English is their primary language. If you see an inordinate number of grammar and spelling mistakes—and no attempt to correct them—you may be talking to an unauthorized broker from a far-off land.

Red flag 3: Buyer’s hesitation to confirm authenticity. If in any doubt, don’t hesitate to contact the actual part manufacturer and ask them to validate the source—before making a strategic mistake.

When fake parts make it into end products—rather than being quarantined and eliminated during production—repercussions are costly. Field failures, service calls, RMAs, loss of reputation and legal exposure—all are likely results. Buyers need to avoid buying fake parts from an unauthorized source then realizing, too late, that the broker and money are long gone.