ERAI’s Annual Counterfeit Parts Report

Key Takeaways of the 2024 Annual Report

• A year-to-year increase in the number of suspect counterfeit and nonconforming parts reported to ERAI continues in 2024.
• Active parts that are available through authorized distribution channels are not significantly less likely to be suspect counterfeit.
• Counterfeiters are constantly adding components from less common manufacturers to their “portfolio,” likely indicating more flexibility and a quicker response to market demands.
• Roughly 50% of suspect counterfeit and nonconforming part reports originated from international (non-U.S. based) organizations.
• Participation of OEMs, OCMs and CMs in reporting suspect counterfeit and non-conforming parts remains low, accounting for just under 6% of all reports.

  ---

The 2024 ERAI Annual Report shows an overall continuation of trends observed in recent years. 2024 showed a moderate increase in the total number of parts reported to ERAI, Inc. with no major unexpected changes to statistical trends. Notable findings from 2024 continued to demonstrate that parts readily available from authorized distribution channels are nevertheless targeted by counterfeiters. Additionally, counterfeiters are expanding their portfolios by targeting parts from a broader range of manufacturers’ brands.

Total Number of Parts Reported to ERAI

In 2024, ERAI reported a total of 1,055 suspect counterfeit and nonconforming parts, a 25% increase over the previous year and the highest number of parts reported by ERAI since 2015.

This marked increase is due to two factors: An increase in reporting correlating to an increase in global semiconductor sales from 2023 to 2024 ($588 billion in 2024 vs. $526 billion in 2023) and one batch of parts (248) reported by the U.S. Government in May of 2024. When excluding the batch report, a 3% increase from 2023 to 2024 is seen. This 3% increase mirrors the increase in reporting from 2022 through 2023.

Types of Parts Reported to ERAI in 2024

We examined the types of parts that were reported to ERAI in 2024 and compared it to the last 5 years as well as the last 10 years. In 2024 the top reported type was “Other” which was the result of the 248 counterfeit fan assemblies reported by the U.S. Government in May. If we look at the reported parts type excluding this, we observe the usual distribution seen in the last 5 and 10 years with Analog IC, Microprocessor IC, Memory IC and Programmable Logic IC comprising the largest segment of suspect counterfeit and non-conforming parts reported to ERAI in 2024.

When examining the trend chart of the most targeted component types over time, we observed that Analog ICs remained the most reported component type. Microprocessor ICs, Memory ICs and Programmable Logic IC reporting remained roughly unchanged from 2023. The decline in reporting of suspect counterfeit and non-conforming capacitors continued with only 6 reported in 2024 (please note: ERAI reported 165 capacitors during the capacitor shortage of 2019).

Manufacturer Brands of Parts Reported to ERAI in 2024

When examining the manufacturers’ brands of parts reported to ERAI, a new brand has occupied the top position, 3ON Systems. However, this once again reflects the 248 counterfeit fan assemblies reported by the U.S. Government in May. If we examine the data without this datapoint, we can see that the top positions in 2024 were occupied by the same brands that have accounted for the majority of suspect counterfeit and non-conforming parts reported to ERAI over the last several years. One interesting observation was the decline in the number of Xilinx-branded parts. When observed over a 10-year period, Xilinx was the most targeted brand; however, the incidence of Xilinx-branded parts reported to ERAI has declined over the last 5-year period and subsequently became the fifth-most targeted brand in 2024. The overall list of manufacturer brands most frequently targeted by counterfeiters remains largely unchanged.

In 2024 we also observed an increase in the number of new manufacturer brands. 21% of all brands reported to ERAI in 2024 were reported for the first time. 29.40% of all parts reported to ERAI in 2024 belonged to brands that have never been previously reported to ERAI.

It is worth noting that most parts branded with manufacturers never previously reported to ERAI were classified as suspect counterfeit parts. It therefore suggests that counterfeiters are not only targeting products of commonly known manufacturers but are also counterfeiting less common component brands.

Manufacturer Brands Reported by ERAI for the First Time in 2024

• BEIJING MICROELECTRONICS TECHNOLOGY
• BEL POWER SOLUTIONS
• BOSCH SENSORTECH GMBH
• CADDOCK ELECTRONICS INC
• CIT RELAY & SWITCH
• CONNOR WINFIELD CORP
• DIONICS INC
• FRONTIER ELECTRONICS CO LTD
• ISABELLENHUTTE HEUSLER GMBH & CO KG
• LEM HOLDING SA
• NINGBO KLS ELECTRONIC CO LTD
• PEAK-SYSTEM TECHNIK GMBH
• PICKER COMPONENTS
• PICKERING ELECTRONICS LTD
• SCHAFFNER EMV AG
• SILICONIX
• SMAR RESEARCH CORPORATION
• SPRINGFIELD RESEARCH CORP
• TUSONIX INC
• U-BLOX AG
• VPT INC
• ZETTA
• 3ON SYTEMS INC

Availability Status of Parts Reported to ERAI

We continued tracking the availability status of components at the time a nonconformance was observed. The objective was to determine if parts were more likely to be counterfeited if designated as obsolete (no longer available via authorized sources), EOL (End of Life) or NFND (Not for New Designs), or allocated (active parts with long manufacturer lead times). It is a common misconception that parts that are active and readily available in the market are less likely to be counterfeited as counterfeiters target mostly obsolete parts. Looking at the numbers for 2024, it appears that while obsolete parts continued to be the most often counterfeited (42.75%), active components (Including readily available, long lead time, and unknown lead time active components) together accounted for 27.2% of reported parts. Interestingly, active components that were readily available via authorized sources were reported more than twice as often as active components with long lead times. This may suggest that availability does not play as large a role in the likelihood of a component being counterfeited.

Parts Previously Reported to ERAI vs. Parts Reported for the First Time

An analysis of parts previously reported to ERAI revealed that once again, the majority of parts reported in 2024 (85.2%) were new occurrences that had not been previously reported to ERAI. A total of 8.4% of parts had been previously reported once to ERAI and 6.27% of parts were reported to ERAI multiple times before. This trend seems to have endured over the last several years. Therefore, it is important to keep in mind that a part is not less likely to be counterfeited if it has not been previously reported. All parts sourced outside of the authorized supply chain should be subjected to the same level of scrutiny.

Entities Reporting Parts to ERAI

We began by looking at the geographic distribution of organizations reporting parts to ERAI in 2024. 51% of parts were reported by organizations located in the U.S., while 49.7% of reports originated from international sources.

A closer look at the reporting organizations shows that in 2024 the largest segment of reporting was made by third party test labs (37.35%), closely followed by independent distributors (31.85%). Reporting by manufacturers (OEMs, OCMs and CMs) comprised only 5.78% of all reports. 23.51% of parts reported in 2024 were counterfeit fan assemblies reported by the U.S. Government.

Summary

In summary, the 2024 results continued the trend started in 2022’s “post-COVID transition year” with an increase in the total number of parts reported to ERAI with no significant changes in the reported parts statistics.

As always, we would like to thank those organizations that share data with ERAI. We highly encourage all companies to report nonconforming parts to ERAI to ensure all organizations in the electronics industry are aware of potential threats.

How to Report a Part

Parts can be reported to ERAI by any organization, regardless of ERAI membership status. To report high risk or suspect counterfeit parts to ERAI, please e-mail a copy of your internal failure report or third-party test report (supplier or customer information can be removed at your discretion) to [email protected]. The ERAI staff will extract the required data and protect your anonymity. You can also submit reported part information through our online reporting interface.

If you have any questions or would like to see any statistical data that has not been covered in this report, please contact Damir Akhoundov at [email protected] and we will do our best to provide the information to you.