Counterfeit chips flood in to exploit chip shortage

September 24, 2021 // By Peter Clarke
Counterfeit chips flood in to exploit chip shortage
Counterfeit and sub-standard chips are a constant problem in the semiconductor supply chain but the situation has got worse as a chip shortage has taken hold globally, according to Nikkei.

In Japan Oki Engineering has opened a chip verification service. And after opening the service in June, Oki had received 150 inquiries by August. After studying about 70 cases it found problematic chips in about 30 percent of them.

With constrained supplies customers are prepared to buy from "unconventional sources," the report said. Industrial and medical equipment manufacturers are amongst those to have subscribed to Oki's chip verification service.

Problems include paying for, and receiving, similar chips to those ordered – such as legitimate microcontrollers but with a different memory or I/O specification. Sometimes criminals go further and alter markings on packaging to try make parts appear to meet specification.

Some of the supplied chips are ones that have failed quality checks. In some cases chips are being reclaimed from discarded electronic equipment and being sold as new, the report said.

While recycling chips from defunct equipment might seem laudable, these chips may have issues around electromigration of metals and, in the case of memories, endurance and data retention. Sometimes leads are misaligned making manufacturing unreliable.

The automotive sector is the one that has been hit hardest by chip shortages, with firms such as Volkswagen and Toyota having to slow and idle plants, and cutting sales volumes due to a lack of key electronic components. General Motors, Nissan, Ford, Honda and Jaguar Land Rover have all also slowed or temporarily stopped production at plants this year.

Meanwhile observers have warned that the supply shortage could continue into 2022 before turning into an oversupply in 2023.

Nikkei report

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