The Free Flow of Fakes

While it’s true that counterfeit parts are pervading all aspects of the electronics supply chain (not to mention consuming all amounts of oxygen from industry pundits such as yours truly), is it possible our sense of fear is overblown?

By fear, I don’t mean “risk” — that’s the inherent chance of failure taken by, knowingly or not, using a fraudulent part. Rather, I mean the “if I do this I might get someone hurt and/or lose my job” feeling.

Yesterday, the SMEMA Council, a group of electronics assembly equipment OEMs, admonished customers to use only authorized channels for replacement parts and service. By using fake parts, SMEMA said, the risk (there’s that word again) users take is that the assembly equipment OEM could void their warranty. That’s a tough nut to swallow, considering the price tag of new placement machines, testers and screen printers.

The question I have is, why would SMEMA even feel compelled to issue such a statement? Faked parts (one old friend says in China, copyright means the “right to copy”) are ubiquitous and systemic. Two US senators this week accused China of blocking a probe into counterfeit electronics by refusing visas to investigators, but it’s hard to know whether the US is truly wants to stop the flow of knockoffs goods or just put pressure on China in order to exact other reforms or negotiating leverage. Indeed, so-called fourth shifts are not only common, they have been for years. So forgive me for being cynical when a few bureaucrats say they want to do something about it now.

In my opinion, there’s no end in sight to the free flow of fakes because, in fact, America and Europe don’t really fear the potential outcome. For a decade, manufacturing programs have been shuttled en masse to China. And while OEMs pay lip service to the notion that their IP is their livelihood, they aggressively seek out the manufacturing partners of their competitors, thus simultaneously ensuring their IP will be shared and that their products will be commoditized.

Let’s put it another way. If company ABC contracts to China and learns a few months later that every Chang, Wang and Li is walking around with a cheap duplicate of their widget, ABC may snort and snarl a few times, but will it fire the folks involved in outsourcing? Highly unlikely. But if that widget never gets built, or ships late because a machine is down or an oscillator is unavailable, heads will roll. Supply chain employee is thus naturally emboldened to take risks that they otherwise might be unwilling to contemplate. The wheel is set in motion.

SMEMA is trying to reorient customers as part of a much-welcome attempt to demand accountability, and I wish them luck, but I don’t think it will make much difference. The corporate buyer culture has changed.

Don’t believe me? Just go to the EMSInsider group on LinkedIn and look at all the listings by members looking for spare parts. Utilizing only approved vendors is nice and all, but when product needs to be shipped before the quarter’s up, the AVL is an industry anachronism.

About Mike

Mike Buetow is editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He is also vice president and editorial director of UP Media Group, for which he oversees all editorial and production aspects. He has more than 20 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow
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One Response to The Free Flow of Fakes

  1. Liz Richards says:

    Mike,
    I do think you make a valid point about accountability in the supply chain, which leads me to make two comments.

    First I think the severity of the situation is not yet understood completely by many who think the worst thing that can happen is your computer lets you down six months early. That’s a lot different than Grandma’s pacemaker failing just when she needs it most; a serviceman’s electronic warfare equipment not detecting the IED it should; and an airplane falling to the ground with 250 souls aboard. If compassion doesn’t stir us, liability should.

    I think SMEMA’s move highlights that, and I think the senators’ concern could very well be a result of the IPC efforts both last year and this through Capitol Hill Days (I participated with a client last year) to raise awareness of the importance of protecting the USA’s electronics industry. Sometimes, as you know, the mills grind slowly.

    We now know that the military expects 10 years before first repair, and medical 7-10 (and increasing every day). Because many of these items are considered hi-rel and often exempt, those “still leaded” parts are often the ones counterfeited or relabeled and recycled even though close to end of life. Which brings me to my second comment.

    It seems to me that until we, in the electronics industry, begin getting serious about designing with “end of life” in mind, preparing for that time when a component is no longer available and designing the “next-phase” component to be ready and available accordingly, all other efforts at stemming counterfeit parts will be somewhat done in a vacuum, and thus have a less-than-favorable chance of success.

    Anything that wakes us up to the severity of the situation is a good move in my mind! Thanks for your thought-provoking piece. It raised some very good points, as always.

    Liz Richards
    Richards & Lord

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