The component cops: a flood of counterfeit parts has given rise to specialists who spot the fakes.

The problem was subtle. The component looked just like a Hitachi part. For starters, there was no visual evidence suggesting otherwise. It passed the solvency test, meaning the ink did not run. Even the marking was great. And it worked.

The counterfeiters made just one mistake: a bogus date code on a part with an end-of-life of 1997.

The knockoff component landed in the hands of DMAC, a Sebring, FL-based component distributor. Sensing a problem, DMAC International (webdmac.com) sent samples to the American Competitiveness Institute (aciusa.org). There, testing proved DMAC's intuition correct.

Counterfeit components cost the industry a reported $15 billion a year, a price tag that includes the cost of rework and other services. Like a bad virus, most counterfeit parts come from Southeast Asia, particularly China. Guangdong Province, home to Shenzhen, has a high concentration of landfilled electronics waste. In fact, the city of Guiyu is considered the e-waste capital of the world. There, a reported 5,500 family workshops process 1.5 million tons of e-waste a year, according to a city Web site. In what many would consider sweat shops, components are pulled off discarded printed circuit assemblies, and given to various laboratories to erase the contents. Then, the parts are cleaned, retinned, black topped, and restamped.

ACI's resident expert, Ken Friedman, is the firm's equipment advisory board coordinator. He came about his role the hard way: He was with DMAC when the company fell victim to $100,000 in counterfeit parts. After 15 years on the component supplier side, the scam jump-started his career as component cop. "I was very motivated to get back at those people who were doing damage to the industry and help other companies not go through what I did," he says.

According to Friedman, the vast majority of bad parts come from two places. Under the first scenario, Chinese component brokers buy fake or old parts from open markets around Shenzhen. Then, they list them for sale on Web sites. That's where the first wrinkle occurs. "The Chinese vendors represent the parts as 'new and unused, but not in original package,'" Friedman says. "That means something different to [those vendors] than to us," Friedman says. "To them, it's 'not broken.'"

Subscribers to those sites buy the parts and bring them into the U.S. "A naive broker will buy the part, ship it to the U.S., and that's where it starts," says Friedman. OEMs or EMS companies that purchase the parts may take some time before using them. In certain cases, they might return it to the broker. If not, it's held in inventory at the assembly shop, and perhaps even resold into the supply chain. This is where scenario two starts. "Let's say a year goes by and the assembler does a consignment sale. They sell on a pallet, where brokers buy from the big pallet sale. This is conducted by auction. So the broker gets $25,000 worth of parts for $8,000. But on a pallet, there's no traceability. It gets put into distributor No. 2's inventory. Now that distributor is listing it, and they sell it to the next company." And the part has effectively been sanitized.

The problem is so rampant, component distributors and resellers have banded to form an association to deal with it. Electronics Resellers Association International (ERAI) gathers, verifies, investigates and reports information received from members and other companies to expose potential problems. Upon request, the group will intervene on members' behalf to help resolve problematic business transactions.

ACI, among others, supplies services for unmasking counterfeits. (Counterfeit is currently defined, in colloquial terms, as fake, or not what the part is represented to be--for example, bad date codes.) The firm counts XRF and microscopy in its toolkit to spot the outliers.

According to Friedman, ACI begins to research the part before it is received, reviewing literature such as the data sheet. The firm conducts a full visual analysis, including microscopy, looking for resurfacing, sanded numbers, laser etching, black topping, lead and tin integrity for residual solder. Markings are examined and matched against the manufacturer's data sheets. Then a solvency test is performed to determine if the ink is authentic, followed by x-ray inspection, and in certain cases, XRF to determine whether the part contains lead.

The range of defects is huge, he says: faked markings, wrong sizes, laser etchings that are improper depths, wirebonds to nothing. Armed with the report, which takes two days, buyers can tell their escrow companies to pull the part so it never infects the supply chain.

While ACI performs testing in Philadelphia, ERAI has gone to the source: China. The group offers visual inspections through the Parthunter office in Guangzhou, hoping to save its members time and money on imports. Inspections consist of a 17-point visual inspection process using microscopy and industry-standard methods for testing marking permanency.

The results are scary: According to ERAI, approximately 60% of parts inspected are rejected as a result of the inspection process.

Mike Buetow is editor-in-chief of Circuits Assembly; [e-mail]. This column appears monthly.

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