EOL Activity Fuels Counterfeit Challenge

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When an electronic component reaches the end of its natural life (EOL), it’s likely to create some headaches. For industries that use high-reliability (hi-rel) chips, though, it’s an even bigger problem as the number of products coming to end of life increases in both frequency and number. Worse, counterfeiters and bad actors are getting better at making chips that would fool even the discerning buyer.

EOL increasing

A number of factors are increasing the number of chips being retired from sale. First, consumer and computing applications are driving demand for increased chip performance, leaving lower volume markets behind. Meanwhile, chip makers are choosing to invest in newer processing rather than spending on retaining the ability to manufacturer older parts. Further, consolidation in the original component manufacturing (OCM) market and the associated consolidation of manufacturing facilities, are accelerating the demise of some chips.

This translates into more  products being deemed EOL, and a trend toward shortening the time between announcing a last buy opportunity and the actual obsolescence date. A process that ideally takes two years (12 months for last orders and a year to ship)  is being truncated into only weeks in some cases.

For high-rel applications which depend on long product life cycles to offset lengthy and expensive design and testing processes, the increased pace of change presents challenges. Often, buying enough product to cover a decade or more of continued manufacturing activity doesn’t make financial sense.

Counterfeiters, meanwhile, are trying to cash in on demand for older parts and the scramble of OEMs to get the parts they need.  For example, our research indicates that more than half of suspected counterfeits are products that are obsolete.

Bad actors are also getting more sophisticated in their attempts to evade detection. It’s no longer a simple thing to spot a fake. For example, counterfeiters may put a dozen or more genuine parts on a reel, followed by counterfeit parts, in hopes that buyers will only quality test the beginning of the reel. Others try to slip by counterfeits that contain working die, but do not meet the more robust demands of high-rel applications.

Spotting fakes

More and more, OEMs must work with their distribution partners to both detect and avoid counterfeit electronic components.  Best practices include:

• Engaging with authorized partners exclusively.
• Requiring 100 percent traceable chain of custody that includes factory sales packaging, manufacturer chain of custody that can be traced to an authorized distributor.
• Adherence to stringent quality standards.
• Establish protocols and procedures for component testing, including visual inspection, blacktop/remarking testing, X-ray and destruct testing.
• Collaborating with partners to innovate and collaborate on creative sourcing ideas, such as bringing a part “back to life” or arranging to have a part manufactured again, beyond its EOL date.

Particularly in a world where the EOL period is being abbreviated, working together to manage obsolescence challenges is only going to get more critical.