Counterfeit Concerns: Navigating the Risks

Estimated reading time: 2 minutes

Nolan Johnson meets with Diganta Das, PhD, and Michael Azarian, PhD, research scientists at the CALCE Electronic Products and Systems Center at the University of Maryland, to discuss the increasing issue of counterfeiting in the electronics and assembly industry. Diganta and Michael highlight the need for robust detection methods and standards to mitigate risks, specifically referencing SAE AS6171 for inspection and AS5553 for counterfeit mitigation. They cover real-world cases, like counterfeit network equipment scandals to relatively simple issues of consumer electronics accessories to illustrate the complexity of the issue and debate the philosophical implications of labeling products that contain a few minor counterfeit components as “counterfeit.”

To address the problem, they suggest that standards organizations like SAE and IPC could play a crucial role. The conversation closes with a call to action for EMS companies to actively participate in creating, shaping, and adhering to these standards to protect themselves and their customers.

Nolan Johnson: Counterfeiting of subassemblies seems to be something we didn’t need to think about previously. What do you see?

Diganta Das: Counterfeiters are getting much more confident about putting together a whole infrastructure, not just for an individual consumer but even commercial B2B purchasers and others. One relatively recent case involved a company and its owner found guilty and sentenced for criminal acts in the state of New Jersey. In this case, the owner put together a system infrastructure of gathering and refurbishing old network control equipment, adding software that would beat the detection software, packaging it in authentic-looking boxes, and selling them as new. Government, hospitals, schools, and small businesses were among his customers. He had offices, eBay and Amazon storefronts, and appeared to be an entrepreneur of the highest level. After what was a decade-long investigation, the Department of Justice raided his offices, and his prosecution led to a guilty plea and prison sentence.  

 It’s an example of the sophisticated strategies used by counterfeiters in other aspects of the supply chain, not just counterfeiting itself. The fraud includes putting up a “storefront” and a respectable appearance that will attract serious buyers.

Johnson: In this particular example, we’re talking about a situation where an EMS company doing assembly for an OEM may find themselves accused of counterfeiting or making an inferior product that they never put together.

Das: That’s it exactly, and it’s interesting to hear you state that risk; it often does not come to our mind like that. An almost philosophical debate that occurred as we started this (and isn’t fully resolved) is when you find a circuit card (board) that an OEM verifiably makes, and yet a couple of capacitors and a resistor turn out to be counterfeit. Does that little sprinkling of parts make the entire circuit card a counterfeit? One can argue that it does. Incoming inspectors approved this product, which went through their manufacturing process. The board might even work. Surely, this can be seen as a mistake; we may not need to call the whole board counterfeit.

To read the rest of this conversation in the October 2024 issue of SMT007 Magazine, click here.