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Top 5 most counterfeited chips...

Posted: 09 Apr 2012     Print Version  Bookmark and Share

Keywords:counterfeited chips  analogue integrated circuits  memories  microprocessors  programmable logic 

The five most prevalent types of semiconductors reported as counterfeits represent Rs.8.37 lakh crore ($169 billion) in potential annual risk for the global electronics supply chain, according to research firm IHS.

The five most commonly counterfeited semiconductor types are analogue integrated circuits (ICs), microprocessors, memory ICs, programmable logic devices and transistors, all of which are commonly used in commercial and military applications. Together, these five component commodity groups accounted for slightly more than two-thirds of all counterfeit incidents reported in 2011, IHS said.


Source: IHS

Looking across the entire industry, the sum total of the application markets where these five most reported commodity groups are used represented Rs.8.37 lakh crore ($169 billion) worth of semiconductor revenue in 2011. These commodities are used widely throughout all major semiconductor applications, i.e., computing, consumer electronics, wireless and wired communications, automotive and industrial.

"There has been a great deal of focus on the issue of counterfeit parts in the defence industry, but the majority of reported counterfeit incidents are for commercial components which have broad use across both military and commercial applications," said Rory King, director, supply chain product marketing, IHS. "Take analogue ICs, for example. One out of every four counterfeit parts reported are for analogue ICs—components which are used in everything from industrial and automotive situations to wireless devices, computers, or consumer electronics. A single counterfeit could impact end products in any of these markets and the potential problem is pervasive, amounting to billions of dollars of global product revenue subject to risk."

The total global analogue IC market was worth Rs.2.36 lakh crore ($47.7 billion) in 2011. The consumer electronics segment in 2011 consumed Rs.48,514.85 crore ($9.8 billion) worth of analogue ICs, or 21 per cent of the global market. Automotive electronics amounted to Rs.39,603.96 crore ($8 billion), or 17 per cent; computing represented Rs.33,168.32 crore ($6.7 billion), or 14 per cent; industrial electronics was at Rs.32,178.22 crore ($6.5 billion), or 14 per cent; and wired communications was Rs.14,356.44 crore ($2.9 billion), or 6 per cent.

"A faulty counterfeit analogue IC can cause problems ranging from a mundane dropped phone call to a serious tragedy in the aviation, medical, military, nuclear or automotive areas," King noted. "Furthermore, the excessive cost of rework, repair, and customer returns for component failures is significant. For the global electronics supply chain, tackling the problem of counterfeit and fraudulent components has become an issue of paramount importance."

IHS said, "2011 was a record year for counterfeit reporting, and incidents of counterfeit parts have tripled during the past two years." Counterfeit parts often are cheap substitutes or salvaged waste components that fail to meet quality requirements, leading to potential failures.

While the top five most counterfeit or fraudulent parts represent a major portion of the counterfeit problem, multiple other types of devices also are vulnerable to counterfeiting and fraud. In all, IHS has data for more than 100 types of integrated circuits, passive components, electro-mechanical devices, and other parts with counterfeit incidents reported against them.

"The industrial segment, which includes both military and aerospace devices as well as medical components, is a relatively minor consumer of the most prevalent parts that are counterfeited," King said. "However, a failure of a substandard counterfeit component in this area can have catastrophic consequences," King said.

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