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36 SMT007 MAGAZINE I JANUARY 2022 Feature Article by Bill Cardoso CREATIVE ELECTRON We are all aware of the semiconductor short- age. While chips are still in short supply, there's been no shortage of news stories about the chip shortage. If media coverage of the prob- lem could actually generate chips, the short- ages might well be over. We've all seen stories about exploding demand for consumer elec- tronics, factories shuttered during COVID-19 lockdowns, supply chain bottlenecks, a dearth of raw materials, and even drought, all trying to explain why we can't get enough of these critical components. What's been lacking in all this news coverage is the age-old problem that accompanies short- ages of just about anything, which is the coun- terfeits that inevitably rush to fill the void. In the case of counterfeit semiconductors, wheth- er they are refurbished, re-marked, fakes, work- ing or not, or even just a fake online storefront, the resulting fraud, and the damage it causes mount as the chip shortage persists. Under normal circumstances, customers can purchase components directly from the manu- facturer or franchise distributor. Chain of cus- tody is easily tracked, and authenticity is rare- ly in question. During supply chain disruptions like we are experiencing now, many companies must look for components on the "gray mar- ket" from third party distributors. is is where the opportunity for counterfeits to corrupt in- ventories starts. Chips purchased through these channels can look perfectly legitimate, and many of them will be, but there are those that, on close inspection, can reveal a completely dif- ferent component on the inside. e COVID-19 pandemic, with factories shut down or slowed, combined with its huge spike in demand, creat- ed the perfect environment for counterfeiters to flood the market with fake chips. ird party independent distributors are not all created equal. Many run highly profession- al and trusted operations, and they fill an im- portant need in our industry for both finding a home for excess inventory and as sources for obsolete components. Some of the best of these gray market distributors are members of IDEA (Independent Distributors of Electron- ics Association) and ERAI (Electronics Resell- ers Association International), organizations The Under-Reported Story of the Semiconductor Shortage: Counterfeits

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