Issue link: https://iconnect007.uberflip.com/i/1527276
OCTOBER 2024 I SMT007 MAGAZINE 33 reported counterfeit parts, 32% are in the U.S. Now, that doesn't necessarily mean a company in the U.S. was counterfeiting a device. ey probably bought it from a company in Asia. When a complaint is made, we'll contact the supplier. It would bode well for them if they cooperated with us and divulged their supplier information. It allows us to dig deeper into the supply chain to find the bad guys. irty- two percent of the time, for whatever reason, they will not say who their supplier is. In those cases, they're the ones who are reported for shipping the counterfeit part. e report goes out with their company name on it. While the U.S. seems to be the number one country, Asia is the number one region. If you include China, South Korea, Singapore, Japan, and India, the Asian region has the lion's share of companies reported for shipping counterfeit devices. Of the entities reporting to us, 67% are inde- pendent distributors, as you would expect. ey're on the front lines, the first to encounter counterfeit devices. A great deal of our infor- mation comes from dozens of test labs around the country and the world, many of which we have had relationships with for 25 years. Fran- chise distributors come in at 9.6%. You would expect that number to be zero because they're franchised, but the truth is that they get coun- terfeits through returns. Distributors have a miscellaneous product code XYZ, where they go out to the open market to buy enough product to fill a customer's requirement. at becomes an opportunity for counterfeiting the OEMs. So, big manufacturing compa- nies are a very small percentage of the prod- uct being reported to us. at tells me that the policies and programs they put in place are working. All these independent distributors find the counterfeit product before they get to the OEM. is little sliver of the pie chart (Figure 5) is where we believe OEMs were frustrated that none of their approved independent distribu- tors could source the product they needed, so they took it upon themselves to venture into the open market. ey bought product from companies that they either didn't vet or didn't know how to vet properly, and they got stung with counterfeit material. I don't have hard data to support that right now, but we think that's what is happening. It's the same with contract manufactur- ers. It's not zero, but these guys are counting on their own efforts and their trusted, rated, approved, independent distributors to knock out counterfeit products. Figure 5: Types of entities reporting parts to ERAI in 2023.