Counterfeit components - an estimated global value

[DrGeoff]

Recent news article states that the counterfeit component industry is worth 169 billion USD per year now, and growing. Looks almost as lucrative as the illegal drug market.
http://www.eetimes.com/electronics-news/4370446/IHS--Counterfeit-parts-represent--169B-annual-risk-?cid=NL_EETimesDaily

Interestingly the analogue component sector is still the significant one being counterfeited at the moment. And this figure is only IC's, not the caps and other dodgy components out there.

[Rufus]

Recent news article states that the counterfeit component industry is worth 169 billion USD per year now, and growing. Looks almost as lucrative as the illegal drug market.

That isn't what it states at all, in fact the article says almost nothing and seems to be written with the intention of deceiving anyone who doesn't read it carefully.

[amspire]

Recent news article states that the counterfeit component industry is worth 169 billion USD per year now, and growing. Looks almost as lucrative as the illegal drug market.

That isn't what it states at all, in fact the article says almost nothing and seems to be written with the intention of deceiving anyone who doesn't read it carefully.

Rufus, Thanks for pointing that out. I had to go back and re-read the article and you are totally correct.

Apparently the whole report is an extrapolation of just over 1000 counterfeit part notifications. All the numbers past that point are pure guess work.

I have absolutely no idea how 1363 counterfeit notifications was extrapolated into  a US$169 billion a year value. You can do amazing things with the right Excel spreadsheet.

If my calculations are correct, that is 177 million dollars cost to the industry for each tube of fake $0.05 LM324 ICs. Wow!

Sounds a bit like the push for more bad international intellectual property rights laws using suspect statistics, just like the appalling SOPA act.

Richard.

[Rufus]

I have absolutely no idea how 1363 counterfeit notifications was extrapolated into  a US$169 billion a year value. You can do amazing things with the right Excel spreadsheet.

It is saying if you divide components into classes the 5 classes with most reported counterfeits have a global market value of $169 billion. They then claim this represents a very scary $169 billion annual risk.

It is as ridiculous as claiming there is a risk of killing 260 million Americans because a lightning strike could hit any one of them.

[Vredstein]

Recent news article states that the counterfeit component industry is worth 169 billion USD per year now, and growing. Looks almost as lucrative as the illegal drug market.

That isn't what it states at all, in fact the article says almost nothing and seems to be written with the intention of deceiving anyone who doesn't read it carefully.

The article is really just a quick re-write of an original press release from the market research firm. A more valuable article would have put in effort to verify the numbers independently.
http://www.isuppli.com/Semiconductor-Value-Chain/News/Pages/Top-5-Most-Counterfeited-Parts-Represent-a-$169-Billion-Potential-Challenge-for-Global-Semiconductor-Market.aspx

[amspire]

I have absolutely no idea how 1363 counterfeit notifications was extrapolated into  a US$169 billion a year value. You can do amazing things with the right Excel spreadsheet.

It is saying if you divide components into classes the 5 classes with most reported counterfeits have a global market value of $169 billion. They then claim this represents a very scary $169 billion annual risk.

It is as ridiculous as claiming there is a risk of killing 260 million Americans because a lightning strike could hit any one of them.

So if you say that not only are fake ICs a threat to the IC economy, it is also a threat to the global economy, then these 1363 notifications indicates there is a 50,000 billion dollar threat caused solely by these fake IC's.

I like that logic. 

[Bored@Work]

Their bullshit is worth preserving for future generations

The five most prevalent types of semiconductors reported as counterfeits represent $169 billion in potential risk per year for the global electronics supply chain, ...
...
The sum total of the application markets where these five most reported commodity groups are used represented $169 billion worth of semiconductor revenue in 2011, ...
...
[Rory] King said ... "A single counterfeit could impact end products in any of these markets and the potential problem is pervasive, amounting to billions of dollars of global product revenue subject to risk," King said.

Like finding some rotten apples in some supermarkets and than claiming the whole business of selling apples is at risk everywhere.

I would say a combination of FUD from IHS, and maybe that Mr. McGrath wasn't the best and brightest at math and logic in school so he had to become a journalist. If you want to learn a little bit more about Mr. McGrath, here is a press release about him from 2008 http://www2.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/08-18-2008/0004869016&EDATE=

Dylan's 's fast and aggressive in his reporting while thoughtful and
engaging with his sources." ...

I believe the firt two (fast and aggressive) but have a problem with the third (thoughtful). I can believe the fourth (engaging). maybe Mr McGrath is even a little bit too close to his sources.

[JonnyBoats]

This reminds me of the MasterCard TV commercials they run in the US:

Cost of producing a counterfeit IC - $0.10
Getting the counterfeit ICs into the supply chain - $50,000
Having your counterfeit ICs in your enemy's missiles when war breaks out  - priceless!

[sacherjj]

This kind of reminds me of this TED talk:

http://blog.ted.com/2012/03/20/the-numbers-behind-the-copyright-math/