05 Aug 2021 -
 General

Length of shortage creates incentive for counterfeiters to invest in infrastructure

While in the middle of a shortage we see two things; a shift in allocation strategies and methods as well as an increase in counterfeit components, write Evertiq. How does this current crisis compare to previous ones?

“From an economics perspective, the incentive to counterfeit a component is higher in the current market compared to 2018. Back then, we were talking about parts that normally cost a fraction of a penny, that were selling for 10x that price. But it was still just pennies. In the IC market, parts are already more expensive, so a small multiplier is much more significant in value. Also, the timeline for the shortage to continue is longer this time. Most estimates say that we are in this allocation market for a year or more. This means that a counterfeiter is incentivized to invest in the infrastructure to create more and higher quality counterfeits, whereas if this was a short-term circumstance, then it would not be worthwhile for them to invest in sophisticated counterfeiting processes,” says Chintan Sutaria, CalcuQuote president.

Looking to the future, how would you speculate this current situation will develop, asks Evertiq

“Perhaps this is because recent scars feel more significant, but it seems to me that we have one supply chain crisis after another. Supply chain professionals do an excellent job of reacting to these volatilities. However, it is important that we comprehensively address the root causes of these recurring problems. The best way of addressing them is placing a focus on transparency in supply and demand. We need to create more of a cushion in the supply chain, utilize better forecasting tools, and adjust our expectations to reflect the changes we see around us,” Chintan Sutaria concludes.

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Either through the hundreds of manufacturers we purchase directly from, or the international network of component supply-partners offering full product traceability, Astute Safe-Supply, run by sourcing experts and offers a deeper insight into the global components markets.

With real-time access to the latest listings and prices cultivated through several decades of close supplier partnerships, we are able to spot price disparities and leverage product price variances to deliver cost-effective solutions to customers, whilst ensuring a quality, risk-free supply.

For more help with looking at supply chain options, contact Astute Electronics here

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