Crisis due to lack of chips, many manufacturers fall prey to scammers selling fake chips

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2021-08-28 01:34:08

Strong demand for consumer electronics and chip shortages have made it difficult for manufacturers, from smartphones to cars, to suffer. Not stopping there, another prominent problem affecting companies that need to buy chips is the appearance of fraudulent companies selling fake semiconductor chips.

The complete process to design a legitimate chip can take up to half a year. Delivery times, the length of time from placing an order to receiving a chip, are increasing, which indicates a serious shortage.

The pandemic is to blame, but many automakers have also misjudged consumer demand. When consumers started ordering new cars, manufacturers were dumbfounded and realized they couldn’t replenish the amount of chips used to make their cars.

In addition to the strong demand from smartphone manufacturers, some companies have a phenomenon of hoarding chips, leading to many companies falling into a state of panic, they risk their lives to turn to unreliable sources. to buy chips instead of their usual supply chain. As such, the counterfeiters have the perfect environment for their scams.

Counterfeiters have begun promoting their products through search engine ads, which is usually not where you’d expect legitimate chip suppliers to find customers. While some scammers ship buyers fake chips that are poorly made or don’t work, others opt for a more “profitable” scam in which the buyer has to pay for the chips up front. which they never received and the scammer also gave every reason to refuse delivery.

Crisis due to lack of chips, many manufacturers fall prey to scammers selling fake chips - Photo 2.

It takes too long to build new manufacturing facilities, which is unlikely to be a practical solution to chip shortages.

John Annand, an analyst and director in the infrastructure group at enterprise analytics firm Info-Tech Research Group, said, “Many frauds occur simply because buyers are pressured to pay fraudulent chip distributors on the web, who will hastily shut down websites by the time the product is supposed to arrive. , canceling any possibility of a refund of the buyer.”

Worse, many of the companies that were duped refused to disclose it publicly because they didn’t want their competitors to know about it. This affects the transmission of information that helps deter counterfeiters. Mike Borza, chief security officer at chip design firm Synopsys, said:Companies don’t want to admit that they don’t have enough knowledge or control over their supply chains to prevent fraud.”

Selling counterfeit chips is a practice that can have serious consequences, says Borza: “They can malfunction under certain conditions or fail permanently before their normal expected life. These failures can create reliability and warranty issues, causing costly to product manufacturers and erode customer trust.”

Reference: PA

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