Often initially established by Western-based technologists who simply
needed a high-volume sub-contract manufacturing source in a significantly lower labour cost area compared to the EU or USA., commercial counterfeiting companies in China are typically large and highly organised and give employment to hundreds of highly trained personnel across many technology disciplines. They are remarkably pro- active, and the type of counterfeit electronic components they make available to the market at any point in time tends to be closely linked to supply and demand cycles in the global semiconductor market. Their output is usually remarkably good, passing demanding OEM test procedures and operating to data sheet specifications for the predicted lifetime of the end equipment. All counterfeit electronic products impinge on the Intellectual Property
Intellectual property theft China enterprise has been the manufacturing source of most counterfeit products over the past few hundred years. Not that there was originally a general intent to defraud as the Chinese populace then had little understanding of the concept of intellectual property (IP) ownership. Rather they just set out to manufacture copies of Japanese plates and bowls etc., to ‘help’ fulfil demand in an existing market. But things have progressed, and manufacturers, the populace and legislators in China are today apparently proud of their ability to pirate IP and produce counterfeit product. But that all counterfeiting is IP theft is today widely recognised, at least in Western economies. For many years Western governments have written IP protection into their economic legislation in order to protect the endeavours of the inventor or designer and protect the interests of individual and corporate investor(s).
Chinese enterprise Unlike counterfeit consumer products that are sold primarily on low price, counterfeit electronic components are usually made available at prices significantly higher than market pricing, driven by product scarcity when the IP holder for whatever reason, is unable to meet the current market demand. Until quite recently the Chinese counterfeit electronic components industry was led by “mom & pop” operations that typically targeted military and aerospace customers who require highly specialist components in very small volumes. But the last twenty years or so have seen a massive rise in ‘Professional Commercial’ counterfeiting operations in China. It’s estimated that the country is responsible for producing >99 per cent of the counterfeit electronic components available to the market today.
rights of the organisations that designed them and negatively impact their revenue streams, and therefore on their ability to re-invest. The burden of stopping the proliferation of counterfeit electronic components largely falls on the original IP owner, but all companies in the supply network have a part to play. Bad and good counterfeit electronic components can cause the original components manufacturer - and the OEMs that use them in their end-product - untold reputational damage. All counterfeit operations are driven by demand: Eliminate that “demand pull” and their market all but evaporates. But this will only be achieved once all responsible purchasing organisations in the electronic components supply network - when made an offer that sounds just too good from outside of their trusted supply network – just say: “No.”
Further information CIE readers who would like to learn more about counterfeit avoidance may wish to review the information held by the Anti-Counterfeiting Forum
www.anticounterfeitingforum.org.uk or attend the SMTA – “Counterfeit Electronics and Material Symposium” at
https://smta.org/events/EventDetails.aspx?id=1665471&group=
For information Adam Fletcher is chairman of the Electronic Components Supply Network (ecsn), a business association established in 1970 that today offers support to all organisations with an interest in electronic components throughout their entire lifecycle. He is also chairman of the International Distribution of Electronics Association (IDEA), an association of individual country electronic components associations whose objective is to arrive at and share industry best practice.
www.ecsn-uk.org “…Promoting Positive Collaboration Throughout the Electronic Components Supply Network to Benefit Members and the Economy…” vii
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