Guaranteed Security and Authenticity in the Authorised Supply Chain
Rochester Electronics’ 100% Authorised, traceable, and certified solutions D
id you know authorised distributors accounted for just 25-29% of global semiconductor revenue in 2022, with
most sourcing coming from non-authorised channels? These non-authorised channels make up the “gray market.” Unauthorised or ‘gray market’ semiconductor distributors function without official agreements with original component manufacturers (OCMs). They often obtain products through various channels, such as excess inventory, outdated stock, or counterfeit devices. Dealing with unauthorised distributors poses risks of receiving inferior or counterfeit products. Additionally, unauthorised channels cannot offer manufacturer-supported warranties.
What are the semiconductor distribution channels? Authorised distributors: Authorised distributors provide a supply source directly from the OCMs and are fully authorised by them. They are traceable and certified. Non-authorised/independent distributors: Independent distributors lack direct authorization and cannot provide a secure supply chain. While some may offer component testing, there is still no guarantee of the product’s authenticity. Non-authorised dealers: Non-authorised dealers purchase components from various sources and resell them, posing the least safe option for customers due to the lack of quality guarantees. This also exposes customers to an increased risk of purchasing counterfeit devices.
Purchasing from non-authorised sources can lead to the following risks: • No access to manufacturer-backed warranties or technical support
• An inconsistent supply chain and an increased risk of supply chain disruptions.
• There is no guarantee of compliance with industry standards, which increases the risks of substandard and counterfeit products and customer financial and reputational risks.
The risks posed by counterfeit devices are
very real and growing. According to North Carolina State University, counterfeiting has grown from a $30 billion trade problem in the 1980s to one that now exceeds $600 billion in trade. The 2023 ERAI report shows an increase
in reported counterfeit and nonconforming parts, and this number has only increased in the past two years despite a decline in global semiconductor sales.
The consequences to customers in allowing substandard or counterfeit products to enter the supply chain include: • Reduced production yields and increased rework
• The introduction of malware or changes that enable third parties to access the software
• Increased in-service failures and reduced reliability
• Heightened risks and financial liability associated with catastrophic system failure
• Potential reputational damage Customers are not the only ones threatened;
lost revenue and, more seriously, reputational damage also impact OCMs.
The true number of counterfeits cannot be known. While self-reporting tools, such as the Government-Industry Data Exchange Program (GIDEP) exist, customers lack the incentive to admit to purchasing failures. For customers to protect themselves, it is safer to assume that all semiconductors sourced outside authorised channels are potential counterfeits. Each counterfeit poses risks to the user. Re-marking: Re-etching external markings on products using aggressive chemicals or mechanical grinders can damage internal bonds or substrates. Residues from cleaning processes may contaminate devices, leading to bond-pad or bond-wire failures. Deceptive re-mark printing often evades AS6081 visual tests. Basic AS6171 testing won’t detect performance issues in re-marked parts or those failing Original Component Manufacturer (OCM) standards but recovered illegally. Recovery Process: Semiconductor recovery from old PCBs can cause severe heat and mechanical damage. Prolonged exposure to humidity, water, and salt during storage, coupled with replating and reforming, introduces ESD, thermal, and mechanical risks, resulting in superficially authentic but unreliable products.
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Identifiable Surplus Stock: Unauthorised traceability doesn’t ensure quality or reliability. Uncontrolled storage and handling conditions lead to ESD damage and moisture ingress, undermining authentic surplus stock reliability. Desperate procurement increases counterfeit risks in unauthorised spaces. According to Electronic Sourcing North
America’s 2024 Reader’s survey results, semiconductor buyers’ primary concerns revolve around product quality, authenticity, counterfeit components, lead times, obsolescence, and sourcing end-of-life (EOL) parts. All these concerns can be addressed by exclusively engaging with fully authorised channels.
Why purchase from 100% authorised semiconductor suppliers? • Guaranteed product authenticity and reliability • Manufacturer-backed warranty and support • Avoiding the risks of counterfeit components • Adherence to industry quality standards and certifications
• Fully traceable supply chain • A safe stock of obsolete components Many customers assume that unauthorised
or grey market sources are the only option once the original manufacturer stops producing a component. However, this is not the case. When an original component manufacturer (OCM) discontinues a product, customers often have a final buying opportunity offered directly from the OCM. Often, customers do not want capital tied up in a large amount of stock, can’t fund a substantial purchase, or lack sufficient storage facilities. When their supply is depleted, they must find a new supplier, with limited safe options for sourcing a product after the “Last Time Buy” (LTB). A supplier with an established EOL transition path, such as Rochester Electronics, offers the hope of risk- free ongoing authorised stock and production.
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