Counterfeit Connectors
By Bob Hult, Bishop & Associates Inc.

Just about any product that has earned a reputation for quality or exclusivity has attracted imitators. In itself, that would not necessarily be a bad thing if the imitation was manufactured under license to the same specifications and the manufacturer did not represent it as a genuine article. Certified second sources have become an important part of the connector landscape. Unfortunately, the market is flooded with counterfeit products that have been crafted to look identical to the name brand item, but are manufactured using inferior materials and workmanship. Respect for intellectual property is not much of a concern to these folks, and the original designers suffer — as well as the unwitting consumer.

Crafty counterfeit suppliers thrive as consumers trying to save a few dollars are willing to believe they are getting a great deal by buying faux products — either knowingly or by mistake. Rogue manufacturers can profitably divert business from innovators without incurring the costs of product development, skilled manufacturing processes, quality materials, and establishment of name brand recognition. Suppliers of knockoff products ignore copyright laws that are intended to protect intellectual property and proprietary designs, and use identifying logos to convince customers that they are getting a bargain on a name-brand product.

Fake Products, Real Risks
Counterfeiting continues to grow, and includes nearly every industry. We’ve all heard about the $10 fake Rolex watches and cheap handbags with designer labels. But the dangers extend beyond fashion. Bogus media, including CDs and DVDs, has severely impacted the entertainment industry. Counterfeit consumer electronics, including cell phones, video players, and cameras, look nearly identical to the genuine article, but fail quickly and don’t meet warranty coverage. A watch that fails after a few months, or a pair of shoes that begins to come apart, can be annoying but does little harm except to the expectations of the buyer. Other forms of counterfeiting have much more serious implications.

The stability of our information structure is at risk: Estimates suggest as many as 20% of Windows operating systems are counterfeit. Since these fakes may not receive Microsoft’s automatic updates, hackers are able to infect a growing number of computers through these faulty systems. Footwear is the number-one counterfeited product in America, with more than $100 million worth of bogus product seized. Counterfeit boots manufactured in Asia have been found with enough cadmium and lead to qualify as hazardous waste material. Toys tainted with lead have become a concern to parents.

Exceptional profit potential has opened the door to medications counterfeiters who offer formulations with reduced potency, pills tainted with dangerous contaminants, and even useless placebos. Estimated global sales of counterfeit drugs in 2010 exceeded $75 billion, up 90% since 2005. Patients who rely on the effectiveness of prescribed drugs are at serious risk when taking these fakes.

In the late 1980s, manufacturers of military aircraft began to notice bolts that were failing incoming inspection tests. They often were improperly marked or had no markings at all. Subsequent investigation proved that bolts constructed with inferior steel and improperly formed posed a serious risk of failure in critical applications. Fake bolts have been found in off-road equipment, trucks, forklifts and other heavy-duty applications. A failed bolt can cause equipment or structural collapse, resulting in death. Counterfeit automotive parts have also experienced a growth spurt.

The primary sources of these unauthorized products appears to be China, India, and to a lesser degree, Mexico. A recent Wall Street Journal article profiled imitation retail outlets popping up in China that are designed to look exactly like IKEA and Apple stores, but sell a mix of authentic and copied products.

The Electronics Connection
Electronic components have not been immune from the counterfeiting craze. High-volume commodity products represent a growing segment of the counterfeit market.

Semiconductor chips that range from memory to processors have been reverse engineered and sold without authorization. In some cases, they are illegally marked with a recognized supplier’s logo and part number. Reject chips that have failed to perform to specification or died during burn-in have also found their way into the market. OEMs are also seeing parts that have been removed from recycled e-trash, cleaned, relabeled, and sold as new components. The majority of these chips have been channeled through unauthorized distributors.

Failure of critical components used in military equipment has attracted the attention of the Department of Defense as well as the Senate Armed Services Committee. The high unit value of components used in military and avionics applications has made this segment particularly profitable to counterfeiters.  A report issued by the Department of Commerce found that 39% of companies contracted by the DoD encountered counterfeit electronics from subcontractors. The expanding use of Commercial off-the-shelf (COTS) components in mil/aero equipment introduces an additional challenge to ensure that only authentic parts that fully satisfy the product specification are used.

Low-cost imitation components also pose an increasing threat to the consumer electronics market by damaging the quality image of a trusted manufacturer, while draining earned profits to the supplier.

It appears that just about every type of electronic component is susceptible to counterfeiting, including capacitors, batteries, and relays. A contractor recently reported difficulty in installing structured cabling. Although the cable jacket had the proper UL logo, closer examination found it consisted of aluminum wire that had been plated with copper. Contractors now weigh their cable if they suspect fake UTP Cat 5 wire, as aluminum will weigh about 1/3 less than solid copper.

Monster cables are recognized as high performance/value cable assemblies, an ideal target for forgers who take shortcuts in fabricating lower cost knockoffs. In one case, the counterfeiter eliminated a critical shield that protects the transition between the cable shield and the HDMI connector. The overmolded strain relief looks identical to the Monster assembly.

Although there have been few reports of bogus electronic connectors, they represent a $45 billion global industry, which makes it increasingly likely to attract more attention from counterfeiters.

Knock-off connectors may be manufactured using a variety of shortcuts. Connectors from rogue manufacturers have been found to scrimp on plating thicknesses and consistency. Connector failure after a few years of service can often be traced to the elimination of the critical nickel underplate that separates the base contact material from the plating on the mating surface. Connectors that exhibit poor contact true position due to loose manufacturing tolerances can stub or fail to mate entirely. Once introduced into the supply stream, these faux interconnects are difficult to identify, as they are often visibly identical with the original, down to individual mold marks. To date, the most common way fake connectors are detected in the supply chain is when a failed interface is returned to the brand name supplier for analysis.

As the market for higher performance connectors heats up, it may be more difficult for unauthorized manufacturers to sell fakes. At less than 1 Gb/s data rates, mechanically identical connectors often perform well. As bandwidth increases into the multi-gigabit range, however, transmission line effects become dominant, making tightly controlled impedance, insertion loss, and crosstalk critical criteria. Subtle differences in design of the contact and connector body can result in significant variations in high-speed signal propagation. The cost of duplicating connectors to this degree will require more technical resources than would be available to the typical counterfeiter. It remains to be seen if the higher price per line of high performance backplane and mezzanine connectors will attract counterfeiters to this product segment.

The trend toward outsourcing of components as well as system manufacturing may provide increased opportunities for connector counterfeiters. The majority of commercial commodity interfaces, such as Universal Serial Bus, HDMI, and D-subminiature connectors, are manufactured in Asia. The necessary manufacturing technology has been transferred to offshore suppliers and their subcontractors enabling them to duplicate a particular interface.  It is also possible that unauthorized production overruns could be channeled into the gray market and end up competing for business with the name brand connector. Contract manufacturers, also located in Asia, may find lower-cost alternatives to qualified parts to be very attractive and ignore the differences in quality.

Creating Solutions
Connector manufacturers have taken a more aggressive stance in protecting their intellectual property by patenting new products early in the design cycle and actively pursuing infringement. Production runs are closely monitored to ensure that excess inventory is not available to the gray market. New policies have been introduced that ensure obsolete, production overruns, and scrapped product is accounted for.

The electronics industry has begun stepping up to the challenge of bogus electronic components. A consortium of organizations, including NEMA, UL, CSA, and the National Association of Electrical Distributors (NAED), have formed the Anti-Counterfeit Products Initiative, with the objective of exposing the extent and impact of counterfeit electronic components. Recognizing that the majority of bogus parts are entering the market through electronic distributors, the Electronic Components Industry Association (ECIA) has created a website that lists inventories of authorized manufacturers. Engineers and buyers can avoid gray market components by ensuring that suppliers provide only authentic parts documented on this list. 

The ERAI organization monitors, investigates, and reports issues affecting the global electronic supply chain. They have become a primary source of in-depth information on counterfeit, substandard, and high-risk components. In August 2011, ERAI published an extensive report on counterfeit electronic parts and laid out a series of actions to mitigate the risk.

Large electronic distributors, including Digi-Key, have partnered with the Electronic Components Industry Association (ECIA) to sponsor a website that lists products sold only by authorized distributors and carry the full manufacturer’s warranty.

Panduit recently joined the Communications Cable and Connectivity Association (CCCA) effort to stem the proliferation of counterfeit wire and cable in the structured cabling industry.

OEM procurement managers are adopting defensive strategies to prevent introduction of bogus components into their end products. These may include: 

1. Establishment of a rigorous qualification process for all of their approved vendors.

2. Development of detailed mechanical and electrical specifications.

3. Commitment to extensive incoming inspection procedures.

4. Procurement only from authorized distributors.

5. Inclusion of a quality clause in purchase agreements with all approved vendors

6. Closer monitoring of quality at both the component supplier and contract manufacturer levels.

The battle between legitimate manufacturers and imposters is likely to continue, as pressure to reduce costs remains a basic mantra within the electronic industry. The street corner peddler selling fake watches from a pushcart has morphed into a cadre of sophisticated manufacturers who see no conflict with marketing faux electronic components. They use the Internet to market their illicit wares to a global market. It is difficult to accurately measure the extent of business lost to these unauthorized manufacturers, but awareness of the problem is increasing. Greater vigilance throughout the supply chain on the part of both suppliers and consumers can help to limit this growing threat.

Bishop & Associates Comments: 

1. Counterfeit electronic components are increasingly entering the supply chain, but it is difficult to quantify the extent of the problem.

2. Far from a victimless crime, counterfeit manufacturers often violate child labor laws, steal earned profits, ignore copyrights, reduce U.S. job opportunities, and put potentially dangerous products on the market.

3. The majority of bogus parts are manufactured in China, and unauthorized distributors offer them directly via the Internet.

4. Counterfeit or substandard electronic components may be based on design or materials that will result in delayed failure, making field repair much more expensive.

5. Governments have largely been unsuccessful in protecting intellectual property rights via legislation.

6. Multiple government and industry organizations have established policies and suggested practices to fight the growing threat of bogus electronic components.

7. High-value components destined for military, avionic, and space applications are targets of counterfeit component manufacturers and raise national security issues.

Robert Hult Director of Product Technology, Bishop & Associates Inc. Robert Hult has been in the connector industry for more than 39 years. Hult began his career as a sales engineer for Amphenol in Chicago. He joined AMP Inc. in 1972 and served in several management positions through 1996. In 1997, Hult joined Foxconn as group marketing manager for Intel in Chandler, Arizona, U.S. Prior to joining Bishop & Associates, Hult was the regional application engineering manager for Tyco Electronics (now TE Connectivity). Hult graduated in 1968 from Bradley University with a bachelor of science degree in electronics technology and a minor in business.