Cover Story
The security and authenticity of the authorised supply chain
Rochester Electronics’ 100 per cent authorised, traceable and certifi ed solutions D
id you know authorised distributors accounted for just 25-29 per cent of global semiconductor revenue in 2022, with most sourcing coming from non-authorised channels? T ese non-
authorised channels make up the ‘grey market.’ Unauthorised or ‘grey market’ semiconductor distributors function
without offi cial agreements with original component manufacturers (OCMs). T ey oſt en obtain products through various channels, such as excess inventory, outdated stock or counterfeit devices.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 off er 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. T ey are traceable and certifi ed. Non-authorised/independent distributors: Independent distributors lack direct authorisation and cannot provide a secure supply chain. While some may off er 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. T is 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.
• T ere is no guarantee of compliance with industry standards, which increases the risks of substandard and counterfeit products and customer fi nancial and reputational risks. T e 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. T e 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. T e consequences to customers in allowing substandard or counterfeit
products to enter the supply chain include: • Reduced production yields and increased rework • T e introduction of malware or changes that enable third parties to
06 February 2025
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• Increased in-service failures and reduced reliability • Heightened risks and fi nancial 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. T e 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 oſt en evades AS6081 visual tests. Basic AS6171 testing will not 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 superfi cially authentic but unreliable products. Identifi able 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 per cent 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 certifi cations • Fully traceable supply chain • A safe stock of obsolete components
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