Why the components in your PC could be fakes

 

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By Stewart Mitchell

Posted on 21 Feb 2008 at 08:14

PC Probe: Stewart Mitchell investigates the growing problem of cloned components in our PCs

The spec sheet on your PC might list a dozen big-brand components but, even if you've peeked inside the case and verified the parts for yourself, there's an increasing chance that those components are not what they seem.

Mention counterfeiting and most people think software and pirated versions of Windows or Office. But hardware is proving to be an equally tempting option for the forgers.

As many as one in 10 IT products being sold globally is counterfeit, according to a recent report from the Alliance for Gray Market and Counterfeit Abatement (AGMA), while for devices such as Network Interface Cards, that figure is even higher.

As more IT giants outsource production to China and other Asian countries (where the OECD believes 70% of all counterfeiting takes place) the greater the potential for black marketeers.

The problem stems from the fact that most of the cloned components are made in the same factories as the genuine products - the same production lines, plans and personnel that produce the bonafide products are used to churn out the cheaper fakes.

The unscrupulous manufacturers employ what is known as a "ghost" or "third shift", so the production lines turn out 30% more equipment than the customer ordered. This surplus can then be sold onto the black or grey markets.

And at least some of those good are arriving in Britain. "This is not a small problem - it's huge and it's getting bigger," states Adam Fletcher, chairman of the UK's Association of Franchised Distributors of Electronic Components. "Not all the kit is flawed - maybe nine out of ten are fine - but plenty being sold are really substandard."

Tempting option

PC manufacturers were predictably reluctant to comment on whether they had discovered any knock-off components in their machines. But there's little doubt that system manufacturers that are struggling to compete on the ever-slimmer margins for PC hardware have been tempted.

"Counterfeiters are taking advantage of manufacturers and resellers who are desperate to get hold of vital components at a good price at the right time," says Christos Papakyriacou, managing director of Alpha Micro Components. "Component manufacturers have tried to prevent counterfeiting with alphanumeric marks and bar codes, but these markings are simply copied on substandard components and sold as original equipment."

Her Majesty's Revenue and Customs, which polices counterfeit goods entering the UK, claims it seized more than 4 million items last year, but doesn't break that figure down into sectors. It admits it struggles to tell fake and genuine IT equipment apart.

"We do make seizures and inspections on electronics, but it's usually at the request of another agency or a manufacturer," says a spokesperson for HMRC. "It is very difficult to understand exactly what is and isn't licensed and how would you spot it - the fraud could be well worked.

"If someone's exporting 500,000 iPods for proper shops and then they send another 500,000 for some dodgy Dave, then it's very difficult to spot because they could just alter the paperwork."

And because they are almost identical to the real deal, the fakes are nearly impossible to spot when they arrive in Felixstowe. "We try to stop as many as possible, and we have details from most companies about their goods, so we know what to look for. But in reality they can be very hard to spot as they are often coming out of the backdoor of the same production facilities," claims the HMRC spokesperson.