Is Counterfeiting Only an Obsolescence Issue? Why Your Business May Be at Risk

The Challenge: The Rising Threat of Counterfeit Electronic Components

Between 2020 and 2023, counterfeit electronic components surged by 69.8% (Electronic Resellers Association International—ERAI).

What’s fueling this rise?

• Supply chain disruptions (e.g., COVID-19, geopolitical tensions)

• High market demand for critical components

• Advanced counterfeiting techniques making it harder to detect fakes

Who’s at Risk?

Over 60% of counterfeit electronic components are found in analog, microprocessor, memory, or programmable logic ICs—critical components that drive high revenues and are difficult to replace.

And counterfeiting isn’t just an issue for obsolete parts:

• 46% of all counterfeit components are obsolete

• 49% are still active in the market (ERAI)

That means even new, cutting-edge products are vulnerable to counterfeit risks.

The Hidden Costs of Counterfeit Components

One of the most dangerous trends in counterfeiting is blacktopping, where low-grade components are rebranded as high-reliability parts. The problem?

• Faulty performance & safety risks in critical applications

• Product recalls and financial penalties

• Severe reputation damage and market share loss

• Regulatory non-compliance, leading to legal sanctions

And the worst part? Most counterfeit components are only detected after they’ve entered the market.

How to Prevent Counterfeit Components in Your Supply Chain

A global medical device leader faced supply chain challenges due to counterfeit risks and implemented the following effective strategies to secure its operations.

1. Strengthen Your Quality Management System (QMS)

• Implement strict supplier qualification processes

• Establish stringent Supplier Quality Agreements (SQA) to set legal and compliance frameworks

• Conduct regular supplier audits to maintain quality standards

2. Conduct Rigorous Quality Inspections

• Perform incoming inspections by reviewing Certificates of Conformance (CofC) issued by the Original Component Manufacturer (OCM)

• Use statistical sampling and testing to detect anomalies

• Run outgoing inspections to verify that final products meet quality benchmarks

3. Leverage External Testing Labs

• Partner with specialized electronics testing providers to detect counterfeits

• Analyze material degradation issues such as corrosion, diffusion, and thermal stress

• Identify counterfeit components before they enter production

4. Use Common Sense in Sourcing

• Too good to be true? Be wary of unusually low-priced components

• Sudden availability of scarce parts? Could indicate counterfeiting

• No date codes or original CofCs? Avoid purchasing from unverified sources

The Results: A Secure, Compliant, Counterfeit-Free Supply Chain

By implementing these battle-proven anti-counterfeiting measures, the global medical device manufacturer successfully:

• Eliminated counterfeit components from its supply chain

• Avoided costly redesign and remediation projects

• Prevented reputational damage and legal consequences

Are You Protecting Your Business from Counterfeit Risks?

• 69.8% increase in counterfeiting over three years—are your sources of supply secure?

• 49% of counterfeit components are still active in the market—how do you verify authenticity?

• Failure to act can result in recalls, compliance fines, and market share loss.

• A robust QMS, strict supplier vetting, and external testing can save you millions.

  
  

Don’t wait until counterfeits cause a disaster. Let’s discuss how to secure your supply chain.