Will 5G Cause Another Shortage and When?

Unfortunately, another electronic component shortage is looming due to the amazing technology and speed of the 5G network.  One of the biggest questions is; when will it take effect?  5G is set to create another revolution in electronics, but how quickly will it take hold?  The big wireless networks have all begun their initial rollouts to a small group of most metropolitan cities. The plan for the largest players, such as AT&T, Verizon, and T-Mobile, is to cover the US by the end of 2020.  This will be a boon to mobile phone sales initially, but on their heels will be a number of new applications, some that we cannot even imagine at this point.  We will see enhancements to autonomous vehicles, a host of new IoT products, hologram applications to take connecting people across long distances to a whole new level, and virtual reality becoming mainstream. 

These massive changes to the electronics segment beg the next question; how big of an effect will it have on the electronic components industry?  It is estimated that to create just the infrastructure to lay the foundation of the market, which will be happening on a large scale in 2020, will consume $10’s of billions of electronic components.  The overall market segment is expected to reach a valuation of $700 billion by the end of 2025.  The growth rate of the overall 5G industry is estimated to be between 70%-100% per year for the next 5 years.  That is a huge spike in the demand of electronic components.

All signs point to another period of increasing lead times for electronic components.  One of the best protection against your production line coming to a halt, due to one hard to find or counterfeit electronic component, is to have a great independent distributor partner in your back pocket.  AERI’s global reach and quality certifications, such as the AS6081 (Counterfeit Detection Standard) qualify us to support the most discerning manufacturers.  Contact one of our Search Experts by email; USA calisales@aeri.com, Asia ausales@aeri.com, or Europe uksales@aeri.com to schedule a meeting to discuss your needs and requirements.

Counterfeit Detection – Like Playing the Game Clue

The detection of counterfeit electronic components is a lot like playing the classic board game Clue.  Often times we find that there are a number of unusual traits, that by themselves may not make the parts guilty, but when you put all of the evidence together, it becomes apparent that you have found your suspect (counterfeit).  We had a great example of this game of Clue last month.  This particular group of counterfeits lacked some of the more obvious smoking revolver types of evidence.  Blacktopping is one of the most common and easy traits of a counterfeit to observe, but this group of parts had no extra coating to cover up their marking removal.  As you can see in the image, the texture varies in the same place on every part, when viewed with the right lighting.  The suspect, in this case, pulled out his weapon of choice, the micro sandblaster, to remove unwanted part markings, leaving varying textures as our first clue.

Our next clue was the very odd-shaped Motorola Logo.  Without a microscope, it is very difficult to decipher the unusual design of the faked logo.  Take note of the authentic logo as a comparison.

 

 

 

 

 

 

 

 

BAD LOGO

 

 

 

 

 

 

 

 

GOOD LOGO

And our last clue, which was as good as a smoking revolver, was the multiple countries of origin for the same lot code of parts.  The same lot of parts cannot be made in different countries.  That goes beyond all traceability reasoning.  Lot’s are created and tracked to make it easy to locate any deficiencies in a manufacturer’s processing.  The idea is to identify a lot for parts that have gone through identical processing within a small time period.  Parts made in a different country will be manufactured with different machinery, different staff, and often different raw materials; so they will never have the same lot code.

To assure that you are buying authentic parts, please contact one of our Search Experts by email USA calisales@aeri.com, Asia ausales@aeri.com, or Europe uksales@aeri.com.

Scam Artist Luring Buyers Posing as Franchised Distributors

Scam artists are paying for premium google ad placement for specific part numbers, taking orders and never shipping the product.  There has been a recent trend, which ERAI has been following, as one complaint after another is reported.  Current calculations, just recorded by ERAI complaints alone, total $300,000 in losses.  The perpetrators quote the electronic components, request money to be wired in advance, then later the so-called authorized distributors are nowhere to be found.  They do not pick up their phone, answer e-mails or any other communication.  ERAI offers some risk indicators below; 

  1. The sites falsely claim to be authorized distributors for major semiconductor brands.
  2. The sites falsely claim to be members of ECIA.
  3. The sites share almost identical language and, in some instances, are a mirror copy of one another.
  4. Obsolete and hard to find parts are identified as in “stock” at below market prices.

For in depth detail of websites and bank account details related to this scam please visit ERAI’s full report.

To see if there are truly parts out there for your most difficult requirements, please contact one of our Search Experts by email USA calisales@aeri.com, Asia ausales@aeri.com, or Europe uksales@aeri.com

Tariffied?

There are some great benefits related to the new tariffs.  We expect less counterfeiting, reduced intellectual property violations, and more manufacturing in developed countries.  AERI has definitely been affected by the new tariffs.  Generally, we look at the negative impact it has on our business; higher prices, confusing, more government interaction necessary, etc., but we have to consider the benefits as well.

The potential of reduced counterfeits hits closest to home for our industry.  By our account, and that of every other source we have found, China is the largest offender in the counterfeiting of goods.  One might ask, why is that the case?  By our experience and research, it points to the lack of the Chinese government cracking down on counterfeiters.  Through visits to Shenzhen and the surrounding cities producing counterfeits, it seems apparent that some government officials are actually trying to protect the counterfeiting industry.  One has to be inconspicuous and careful when visiting some of the areas that the fakes are produced.  Officials are watching visitors and discouraging examination and photography.  The demands made by the U.S. on China reach into the production of fakes.  There is a culture of acceptance of intellectual property theft and if flows all the way down to the counterfeiting of electronic components.

The other hope of this tariff war is that, although prices at Walmart may go up, Americans will have better and higher paying jobs to pay for the increases.  Entire U.S. cities were financially devastated when trade agreements were put in place in our recent past.  NAFTA, which meant to help Americans save money on cars, TV’s, and other products, while helping our neighbors, wiped out our auto manufacturing industry.  What good are low prices on cars if you don’t have a job?  It will take some time to see the positive effects of the new tariffs on American jobs, but many companies are already announcing that they are bringing manufacturing home.  Let’s hope that we see some great positives that come from this difficult trade war with China.          

Contact Us to learn more about how you can benefit from these international trade changes. 

One More Counterfeiter Peddler in Jail

Another U.S. electronic components broker has been sentenced to prison.  Check your supplier purchases to see if your company may have bought anything from one of his many different company names.  If so, assess the risk to determine if any action is needed.   

Rogelio Vasquez, a.k.a. James Harrison, last doing business as PRB Logistics Corporation in Costa Mesa California, was sentenced by United States District Judge Josephine L. Staton, who said, “Simply put, the scheme was endangering lives for the sake of illicit profit.” Vasquez was also ordered to pay $144,000 in restitution.

From July 2009 to May 2016 Rogelio instructed Chinese suppliers to refurbish and remark used or discarded electronic components to meet the requirements of defense subcontractors, as well as other industries.  Some of the parts ended up being installed in a classified weapons system used by the U.S. Air Force.  In a sting operation, Vasquez sold 106 counterfeit integrated circuits to an undercover federal agent.

Rogelio’s actions show no concern for the many lives he has put in jeopardy.  It is sad that someone would purposefully put others lives at stake for their own monetary gain.  Not only could his actions cause injury, but our country depends on the tools it uses to defend our country.  It is good to know that the Department of Defense is paying attention to this huge problem and bringing those to justice who violate the law. 

Rogelio Vasquez’s many company names included:

  • PRB Logistics Corporation
  • Devices Electronics Components
  • End-Of-Line Components
  • WCG
  • EZ Components
  • Nexxon Circuits Inc.
  • JJ Electronics
  • Actual Assembly Inc.
  • Chapman Distributors Company
  • Electronics Today
  • Advanced Thermal Design Inc.
  • All Electronic Component
  • All American Components Inc.
  • Tekchips Inc
  • Big Time Electronics
  • Nadkyo
  • IC Grid

To see how AERI can help you avoid buying fakes from criminals like these please contact one of our search experts.

Read More about Mr. Vasquez.

The Many Consequences of E-Waste 

Alleging that China regularly uses e-waste to counterfeit electronics while returning these dangerous faux products, including critical military equipment, back into the market, a group of Congressmen on July 1 st introduced legislation to stop the export of electronic waste to the Asian giant. If passed by Congress and signed into law by the President, the Secure E-Waste Export and Recycling Act (SEERA) would stop the flow of e-waste from the US and would require domestic recycling of all untested and nonworking electronics, which will also promote the creation of thousands of new jobs in the United States. 

Read the full article here.

To see how AERI can protect your company from receiving counterfeits go here to Learn More.

 

Tips For Counterfeit Detection

AERI’s reputation as a leader in counterfeit detection of electronic components led Electronics Sourcing magazine to reach out to us for a “How To” article.  This article gives a detailed overview of how to detect fakes in the ever evolving counterfeit market.  Contact Us to find out how we can help you detect counterfeits and keep your production lines moving.

Opening Parts As Small As Pepper

 

 

 

 

 

Life’s no fun without challenges.  While detecting counterfeits we face obstacles every day.  Try to get to the die of a part the size of ground pepper.  Thanks to the latest technology of automated decapsulation and skilled engineers we can get the job done.  One of our lead engineers shared this challenge with us and sent us pictures just for kicks.

 

 

 

 

 

 

Getting access to the die of encapsulated parts is a key process in the detection of counterfeit electronic components.  Doing it well assures that you can distinguish all of the important part information.  Many test houses just blast the parts with acid, leaving a half-eaten piece with lots of scars.  They may be able to get some helpful information, but many times from our experience using a few external test houses, we were unable to authenticate the parts with what was left of the die.  Well trained engineers with quality equipment make all the difference.  Try us out and compare our die images to any of your previous test facilities.  We are sure ours will impress you and give you confidence in our assessment.  

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No End in Sight for Passive Component Shortage

Between the incredible consumption of passive products by the boom in IoT, double ordering for safety buffering, and the time and lack of motivation for manufacturers to increase their production, the shortage has no end in sight.  It is the perfect storm.  Everything we use is slowly being connected.  Even the latest toothbrushes connect to the internet now so you can see how much pressure you are applying and how long you are brushing.  What is next!!! This boom will continue and manufacturers need to respond.  But from what this article states, they are not rushing to fix the shortage.  These products have low margins and are old technology.  The manufacturers have little motivation to make large capital outlays to increase production.  For now, they may just enjoy the ability to reap higher margins on their products.  And in the meantime, users will continue to double order in an attempt to hedge their supply creating an even bigger problem.

Read More

Reported Counterfeits Down in 2018

Great news!!! Reported counterfeit electronic components were down for 2017.  One might think that with the ramp up of the shortage even more counterfeits would be discovered, but exactly the opposite has occurred.  Some speculations for this decrease are;

  • More counterfeit avoidance is being done in the purchasing process.  Weary buyers have likely been more selective who they are ordering from.
  • Government seizures of counterfeit product have potentially caused some international suppliers to give up trying to ship to the U.S.
  • Increased awareness and detection techniques may have stifled sellers attempts to pass counterfeits through previously naïve buyers, causing sellers to give up trying. 

The report at this link only has data up to 2017, but our organization has noticed a decrease in received counterfeits this year as well.  We will have to wait another few months to get ERAI’s final 2018 numbers, but we predict there will not be an increase over 2017. 

ERAI, which was originally created to serve electronic distributors with collection and reporting needs, has been collecting reports of counterfeits for over a decade. They have branched out from accepting reports from distributors only to manufacturers and government as well.  Their database is by far the largest in the industry.  The database is only available by membership, but it is free to report.  Please feel free to ask one of our search experts if you would like us to see if your parts have ever been reported.