The Secret Life of Semiconductor Counterfeits

80% of counterfeits led a former life in products like your TV

Counterfeits are big business. The industry is worth approximately $25B, more than the global music industry. But where do they come from and who makes them?

Like many things, it depends. In the shadowy world of counterfeit electronics, bogus parts typically fall into three categories:

Salvaged components like this one from ON Semi, could have solder residue or bent pins.

1. Scrap Salvaging — 80% of counterfeits

Defective or outdated but not fully destroyed, these components lived another life on another product but have been salvaged, cleaned, reworked and then circulated back through the supply chain. They could be fully functional, but there may be signs of reworking such as solder residue and overheating. While recycling is a positive step in reducing electronic waste, scrap salvaged parts are often sold as new despite damage from manual desoldering.

Relabeled (or “blacktopped”) parts like this ARM chip are lower grade chips with a false top.

2. Relabeling — 15% of counterfeits

Lower grade components have been relabeled to indicate a more expensive product. Counterfeiters purchase lower priced materials, relabel them and sell for a higher price. This type of product often surfaces in manufacturing that involves stringent quality control such as military specifications. These counterfeits will probably not have the same performance life of the higher grade component and will likely have different tolerances and boot up profiles.

This FTDI chip was illegally manufactured but the difference is only detectable by advanced testing.

3. Illegal Manufacturing — 5% of counterfeits

These components are created through the complete manufacturing of bogus parts, labeled to appear as the product of a legitimate manufacturer. These will also have slight differences such as voltage used or boot up profile and thus compromised performance. Harder to recognize, these counterfeits could require advanced electrical testing or careful examination of dies, part of the Mobius quality control testing.

Top counterfeiting targets are typically older, longer lifetime designs by highly known manufacturers such as the famously copied ATMega328 found in Arduinos and many products. From the financial perspective of a counterfeiter, not only are these parts easier to find from salvaged boards, but they are in higher demand and will remain current for longer periods of time, given longer product lifetimes.

Too often perfectly viable components land in the dump simply because it is the cheapest option for manufacturers to rid themselves of excess materials. To combat supply chain shortages, unnecessary waste and a raging counterfeit market, Mobius Materials is working to recirculate the $15 billion of annually trashed components. With a comprehensive, dedicated system for guaranteeing authenticity, Mobius is tapping a previously lost revenue stream for sellers and eliminating the risk of purchasing bad parts for buyers.