SAN FRANCISCO -- The five most prevalent types ofsemiconductors reported as counterfeits represent $169 billion in potentialrisk per year for the global electronics supply chain, according to marketresearch firm IHS iSuppli.
The five most commonly counterfeited semiconductor types areanalog ICs, microprocessors, memory ICs, programmable logic devices, andtransistors, all of which are commonly used in commercial and militaryapplications, according to data provided by IHS. Together, these five componentcommodity groups accounted for slightly more than two-thirds of all counterfeitincidents reported in 2011, IHS said.
The sum total of the application markets where these fivemost reported commodity groups are used represented $169 billion worth ofsemiconductor revenue in 2011, according to data derived from the IHS'sapplication market forecast tool. These commodities are used widely throughoutall major semiconductor applications.
"There has been a great deal of focus on the issue ofcounterfeit parts in the defense industry, but the majority of reportedcounterfeit incidents are for commercial components which have broad use acrossboth military and commercial applications," said Rory King, director of supplychain product marketing at IHS, in a statement.
King said that one of every four counterfeit parts reportedis an analog IC, a component that is used in everything from industrial andautomotive products to wireless devices, computers, and consumer electronics. "Asingle counterfeit could impact end products in any of these markets and thepotential problem is pervasive, amounting to billions of dollars of globalproduct revenue subject to risk," King said.
The total global analog IC market was worth $47.7 billion in2011, according to IHS. The consumer electronics segment in 2011 consumed $9.8billion worth of analog ICs, or 21% of the global market, IHS said. Automotiveelectronics amounted to $8 billion, or 17%; computing represented $6.7 billion,or 14%; industrial electronics was at $6.5 billion, or 14%; and wiredcommunications was $2.9 billion, or 6%, according to IHS data.
"A faulty counterfeit analog IC can cause problemsranging from a mundane dropped phone call to a serious tragedy in the aviation,medical, military, nuclear, or automotive areas," King said. The excessivecost of rework, repair, and customer returns for component failures issignificant, he said. "For the global electronics supply chain, tacklingthe problem of counterfeit and fraudulent components has become an issue ofparamount importance."
IHS said in February that 2011 was a record year forcounterfeit reporting. Incidents of counterfeit parts have tripled during thepast two years, according to the firm. Counterfeit parts often are cheapsubstitutes or salvaged waste components that fail to meet qualityrequirements, leading to potential failures, IHS said.
While the top five most counterfeit or fraudulent partsrepresent a major portion of the counterfeit problem, other types of devicesalso are vulnerable to counterfeiting and fraud, IHS said. In all, IHS has datafor more than 100 types of integrated circuits, passive components,electro-mechanical devices, and other parts with counterfeit incidents reportedagainst them, the firm said.
"The industrial segment, which includes both militaryand aerospace devices as well as medical components, is a relatively minorconsumer of the most prevalent parts that are counterfeited," King said."However, a failure of a substandard counterfeit component in this areacan have catastrophic consequences."
King said organizations can use the reports of counterfeitincidents reported by others to be alerted of problematic parts in circulationthroughout the supply chain.
This story was originally posted by EETimes.