Top 5 counterfeited semiconductors: Analog ICs top the list

April 5, 2012 — The top-5 most commonly counterfeit components (based on reported cases) are analog ICs, microprocessors, memory ICs, programmable logic devices, and transistors, shows the IHS iSuppli Application Market Forecast Tool. Combined, they represent a $169 billion annual risk to semiconductor revenue.

The top 5 component groups accounted for more than two-thirds of all counterfeit electronic components reported in 2011. However, more than 100 types of integrated circuits, passive components, electro-mechanical devices, and other parts have counterfeit incidents reported against them. They are used in all major semiconductor applications, from computing to military applications, automotive electronics, consumer devices, and more.

Table 1. Top 5 Most Counterfeited Semiconductors in 2011 (Percentage of Counterfeit Part Reports)
Rank Commodity Type % of Reported Incidents
1 Analog IC 25.2%
2 Microprocessor IC 13.4%
3 Memory IC 13.1%
4 Programmable Logic IC 8.3%
5 Transistor 7.6%
Source:  IHS Parts Management 2012  

1 of every 4 counterfeit parts reported is an analog IC. The total global analog IC market was worth $47.7 billion in 2011, shows the IHS iSuppli Application Market Forecast Tool. These components are widely deployed across market segments: the wireless market generated 29% of global analog IC sales in 2011, 21% went to consumer electronics, 17% to automotive, 14% to computing applications, and 6% to wired communications.

2011 was a record year for counterfeit reporting, and incidents of reported counterfeit parts have tripled during the past two years. Counterfeit parts are defined as substitutes manufactured and sold as a particular chip, or salvaged waste components that fail to meet quality requirements.

On December 31, 2011, President Barrack Obama signed the H.R.1540: National Defense Authorization Act for Fiscal Year 2012, mandating that participants at all tiers of its global defense supply chain implement processes and systems to analyze, assess and act on counterfeit and suspect counterfeit electronic parts. While counterfeit component detection is a hot topic for defense/military electronics assemblers, “the majority of reported counterfeit incidents are for commercial components which have broad use across both military and commercial applications,” said Rory King, director, supply chain product marketing at IHS.

Table 2 presents the percentage of sales for the five most counterfeited semiconductors by application market.

Table 2. Percentage of Market Revenue for Most Commonly Counterfeited Product Types by Application Market in 2011 (Percentage Share of Revenue in Millions of U.S. Dollars)
Part Type Industrial Automotive Consumer Wireless Wired Compute Other
Analog IC 14% 17% 21% 29% 6% 14% 0%
Microprocessor IC 4% 1% 4% 2% 3% 85% 0%
Memory IC 3% 2% 13% 26% 2% 53% 1%
Programmable Logic IC 30% 3% 14% 18% 25% 11% 0%
Transistor 22% 12% 25% 8% 10% 22% 0%
Source: IHS iSuppli March 2012            
               

IHS (NYSE: IHS) is a leading source of information, insight and analytics in critical areas that shape today’s business landscape. Internet: www.ihs.com.

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