Skip to content

The Counterfeit Electronics Problem

Scale of the Challenge

The global trade in counterfeit and pirated goods reached an estimated USD 467 billion in 2021, representing 2.3 percent of world trade (OECD/EUIPO, 2025). Electronics — including semiconductor components, integrated circuits, and passive devices — constitute one of the most persistently affected product categories.

Key indicators (all from publicly available sources): - ERAI Inc. reported 1,055 suspect counterfeit electronic parts in 2024 — a 25 percent increase over 2023 and the highest count since 2015. - 29.4 percent of all 2024 ERAI incidents involved brands never previously reported, indicating expanding counterfeiter reach. - Free trade zone routing increases counterfeit export probability by 5.9 percent (OECD/EUIPO, 2018).

Regulatory Response

Section 818 of the U.S. National Defense Authorization Act (NDAA) of 2012 established mandatory reporting for counterfeit electronic parts in the DoD supply chain. DFARS clause 252.246-7007 (2014) reinforced compliance requirements across the defense industrial base.

NIST SP 800-161r1 (2022) identifies supply chain lifecycle pressure as a primary risk driver requiring systematic monitoring and C-SCRM controls.

The Gap CILM Addresses

Existing industry frameworks — SAE AS5553, AS6081, AS6171 — specify process requirements for counterfeit avoidance but do not produce a reproducible quantitative risk score at the procurement decision level.

The CILM framework and its CIRS scoring model address this gap by providing a structured, auditable, and reproducible risk instrument calibrated to publicly available trade intelligence and verification standards.

References

  • OECD/EUIPO. Mapping Global Trade in Fakes 2025. doi:10.1787/94d3b29f-en
  • ERAI Inc. 2024 Annual Report. Available: https://www.erai.com
  • OECD/EUIPO. Trade in Counterfeit Goods and Free Trade Zones, 2018. doi:10.1787/9789264289550-en
  • NIST SP 800-161r1. doi:10.6028/NIST.SP.800-161r1
  • U.S. SASC. Inquiry into Counterfeit Electronic Parts, S.Rept.112-167, 2012.

All external data cited above derive from publicly available sources. CILM is an independent methodology. See footer for full disclaimer.