Have you encountered instances where electronic components arrive from distributors without the lot
codes visible on the packaging or possibly even the parts themselves? This occurrence, though relatively
new, is increasingly prevalent. As electronic component manufacturers strive to enhance control over
distribution channels, they frequently rely on lot codes to ensure their products reach intended regions
or end-users. During periods of shortage, components allocated to authorized distributors, contract
manufacturers, and OEMs often find their way into the grey market, where they command inflated
prices due to high demand. Deliberate over-ordering or strategic timing of orders enables these players
to profit significantly from reselling the parts. However, to evade potential penalties from
manufacturers, they or their intermediaries may erase the lot codes, thus obfuscating traceability and
accountability.
The absence of lot codes poses challenges for OEMs and end-users, as traceability is often necessary to
meet customer requirements and verify product authenticity. At AERI, while we disapprove of such
practices, we interpret the removal of lot codes as a potential indicator of authenticity. Legitimate parts
may have their traceability obscured if a party in the supply chain seeks anonymity. The need for
concealing traceability diminishes if the parts are genuine. The crooks making counterfeits want the
parts to look perfect, so erasing lot codes would make their trade more difficult.
Furthermore, not only are lot codes removed from packaging, but they are sometimes tampered with on
the components themselves, most notably on Xilinx parts. Many high-value Xilinx components, such as
those from the XC7, XCZ, XA, and XQ families, feature 2D QR Codes that link to detailed part
information, including lot codes, speed grades and temperature ratings, when the code is read. Xilinx
employs this method to track the destination of its parts, make it easier to mark and alter speed and
temperature grades post testing, and likely other reasons as well. If parts designated for specific regions
or manufacturers are diverted, Xilinx can pinpoint supply chain discrepancies and address them with the
relevant entities. Below is an example of a 2D QR code that has been fully etched over to avoid
traceability.
At AERI, we’re dedicated to assisting you in overcoming the challenges associated with procuring parts
from the grey market. When you encounter difficulties locating parts through your usual channels, our
Search Experts are ready to assist. Our aim is to facilitate seamless procurement and keep your
production lines running smoothly.
