How Counterfeit Electronic Parts and Components Affect Businesses

Although counterfeiting has been an age-old industry, it is only recently that the impact of counterfeit electronic parts and components has come to be highlighted. The public is slowly gaining the awareness of the implications and risks such counterfeited electronics bring to trusting users.

It is difficult for manufacturers to trace the origin of the counterfeited parts compared to the traceability present for the authentic components. It is possible these are older, but legitimate versions of the part, and someone has reprocessed them. On the other hand, these are legitimate fakes, which someone is trying to pass off as real. In both cases, their quality is highly suspect. Receiving counterfeit electronic parts or components in your business can result in mechanical and electrical defects, leading to financial risks and finally to loss of reputation and goodwill.

Mechanical Failures

Scrupulous elements recover a huge number of electronic components and parts from e-waste and reprocess them to sell as new. However, the stress of reprocessing these parts, especially integrated circuits, makes them susceptible to damage. As reprocessing elements do not usually follow proper manufacturing processes, they compromise the integrity of the components, and they occasionally fail to meet the stringent environmental requirements in the field.

Electrical Failures

While reprocessing, usually there is little or no effort to protect the component from ESD damage. Although the counterfeit component may be functioning in the circuit, it is difficult to predict when they will fail. The typical design of genuine electronic components allows them to function for a certain amount of time under specified conditions of use. Reprocessed parts generally fail as their useful life has been exceeded or they have endured dubious production controls and improper processing before they were resold as new.

Financial Risks

Counterfeit electronic components malfunctioning in the product or failing within the warranty period may lead to huge financial ramifications for the business. The financial risks may not be restricted only to simple replacements of the product, but may involve insurance compensations in case human lives are endangered, as could happen in premature failure of sensitive medical devices. The short-term savings from using counterfeit components may not be worth it, considering the financial backlash may turn out to be too huge for the business to handle.

Loss of Reputation and Goodwill

It takes a lot of effort to build up credibility, reputation, and goodwill in business, and these are essential for sustenance and growth of the business. However, the above can only happen provided the customers perceive the products to be of the quality and reliability the business claims they are. Counterfeit electronic components and parts leading to mechanical or electrical malfunctions and failures can easily undermine customer confidence in the business, leading not only to financial loss and legal hurdles, but also to loss of reputation and goodwill.


For safeguarding the business, its customers, its reputation, and goodwill, it is necessary for a business to take proper steps to prevent any incoming counterfeit parts and components.