By: Brent Huston, CEO, virtual CISO & Security Evangelist MicroSolved, Inc. and (CS)²AI Fellow
Introduction
For industrial control systems (ICS) and IoT devices, the prevalence of counterfeit or
recycled electronic components is a serious threat, with wide-ranging consequences.
Examples from the last decade alone demonstrate the critical nature of this issue:
counterfeit components have caused failures in hydroelectric dams, medical devices, and
even military systems. Beyond functional risks, counterfeit components bring a host of
security vulnerabilities, posing new risks as device complexity and reliance on global supply chains grow. With increasing regulatory scrutiny and guidance from ISO, NIST, and CMMC frameworks, it’s essential for device manufacturers to understand and implement effective, practical protections against counterfeit components.
Below, we have identified a set of cost-effective, time-sensitive best practices that can help
manufacturers manage the risks of counterfeit components in their supply chains, from
sourcing through authentication and risk management. Although aimed primarily at ICS and
IoT device production, these insights apply to the broader electronics manufacturing space.
1. Supply Chain Management: Building a Trusted Vendor Network
Work with Authorized Distributors and Manufacturers: Whenever possible, restrict sourcing to authorized channels. Partnering directly with component manufacturers or their authorized distributors minimizes exposure to fraudulent parts.
Maintain an Approved Vendor List (AVL) with Regular Audits: An AVL should include only trusted suppliers who meet security, quality, and compliance criteria. Conduct regular audits to verify that these suppliers uphold sourcing and quality standards.
Implement Chain of Custody Tracking: Adopt tracking mechanisms that maintain clear visibility into the journey of each component, from origin to delivery. For components that travel through multiple subcontractors, blockchain or digital ledger technology can add an additional layer of tracking and transparency.
Require Documentation of Origin: In your procurement contracts, include requirements for documentation showing component origin and handling. This practice is particularly important for high-risk components and for devices subject to regulatory standards.
Incorporate Anti-Counterfeit Clauses in Contracts: Set clear anti-counterfeit requirements within contracts. Specify penalties for any counterfeit part supplied, and ensure suppliers understand these contractual standards.
2. Technical Verification: Strengthening Component Authentication
Incoming Quality Control (IQC) Inspections: Implement an IQC procedure that includes both visual and technical inspections. Establish baseline quality metrics for all components upon arrival.
Detailed Visual Inspection Under Microscopy: Visual inspection can reveal telltale signs of counterfeits, such as markings inconsistencies or tampering. Use high-resolution microscopy to detect anomalies, especially on date/lot codes and other identifiers.
X-ray Inspection for Internal Verification: X-ray inspections allow for a non-invasive look at the internal structure, making it possible to identify discrepancies without damaging the component. This is particularly useful for ICS and IoT devices, where critical components might need additional scrutiny.
Electrical Testing and Parametric Validation: Conduct electrical testing to confirm that components meet original specifications. Testing protocols should include voltage, current, and parametric checks, comparing results against manufacturer-provided values to catch counterfeit components.
Chemical and Decapsulation Testing (Sample-Based): Chemical analysis and decapsulation are destructive but valuable techniques for high-risk or high-value components. By exposing internal materials, manufacturers can verify authenticity based on material consistency and construction details.
Scanning Acoustic Microscopy (SAM) for Die Inspection: SAM allows manufacturers to look at internal die structures without destruction, providing another layer of verification for die-related authenticity and quality.
3. Authentication Methods: Ensuring Component Authenticity
Require Certificates of Conformance: Only source components with verifiable Certificates of Conformance (CoCs) from manufacturers. Cross-reference these certificates against known component data for additional assurance.
Verify Date and Lot Codes: Regularly cross-reference date and lot codes on incoming components with the manufacturer's records to catch any inconsistencies, especially for high-value or long-lead-time parts.
Check Component Markings Under Varying Lighting Conditions: Counterfeit components often lack quality in their surface markings. Using different lighting angles and wavelengths, conduct visual inspections that reveal anomalies in engraving or printing quality.
Document and Photograph Reference Samples: Establish a reference library of genuine parts to compare against incoming stock. Regularly photograph and document samples of genuine parts, as these records provide an effective benchmark to detect counterfeits.
Use Component Authentication Tools: Many manufacturers now provide proprietary tools or apps to verify components. These tools often rely on secure authentication codes or embedded micro-tags and offer an additional layer of verification.
4. Risk Management: Building Resilience into Manufacturing Operations
Conduct Regular Supplier Audits: Periodic audits are essential to verify supplier practices. In addition to financial and contractual audits, include inspections focused on quality control and anti-counterfeit measures.
Maintain a Counterfeit Incident Log: Tracking known counterfeit incidents provides insight into trends and high-risk sources. Shared intelligence from industry groups (such as industry-specific ISACs) can further enhance this log, helping the industry respond collectively to rising threats.
Share Intelligence with Industry Partners: Proactively sharing information about counterfeit sources and high-risk suppliers within industry groups enhances overall security. Collaborative intelligence sharing can reduce counterfeit activity across industries.
Develop Contingency Plans: In cases where suspect components are found, have contingency protocols in place. This can include alternative sourcing options, production adjustments, or design revisions to avoid manufacturing delays.
Create Quarantine Procedures for Suspect Components: Set up a process to segregate potentially counterfeit components from legitimate stock. Ensure there’s a protocol for isolating suspect parts until further verification can confirm or rule out authenticity concerns.
5. Component Selection and Design: Reducing Counterfeit Risks through
Strategic Design
Design with Commonly Available Components: Whenever possible, design products with components that are readily available and widely sourced. This reduces dependence on hard-to-source components, which are often prime targets for counterfeiters.
Avoid End-of-Life (EOL) Components: EOL parts pose significant counterfeit risks due to scarcity. Proactively monitor component lifecycles and design with current-generation parts to reduce reliance on EOL inventory.
Maintain Buffer Stock of Critical Components: Stocking critical parts reduces the need for last-minute purchases from unknown suppliers, lowering the risk of introducing counterfeit components under time pressure.
Consider Built-In Authentication Features: For critical ICS and IoT devices, consider designing products that incorporate built-in authentication capabilities. RFID tags, microdot technology, or secure microcontroller-based validation methods can help distinguish genuine components from counterfeits.
Conclusion
Given complex supply chains and global component demand, the risks associated with
counterfeit electronic components are pervasive and costly. By implementing these
protective measures across supply chain management, technical verification, authentication, and risk management, manufacturers can substantially reduce their exposure to counterfeit risks without incurring prohibitive costs or delays. The key lies in prioritizing high-impact, cost-effective practices that align with ISO, NIST, and CMMC standards—establishing an end-to-end protective strategy that secures components before they impact production and, ultimately, the integrity of ICS and IoT devices.
For manufacturers, the stakes could not be higher: compromised ICS and IoT devices don’t
just endanger the systems they control but can lead to severe safety, security, and financial
repercussions. As the industry continues to face rising counterfeit threats, proactive and
practical countermeasures are essential to safeguarding today’s devices—and the
infrastructure and lives that depend on them.
Additional and reference resources:
ISO 9001:2015 - Quality Management Systems
ISO 28000:2022 - Security and resilience — Security management systems — Requirements
Semiconductor Industry Association (SIA) Reports and Policy Documents
International Electrotechnical Commission (IEC) Standards
ISO/IEC 20243-1:2023 - Information technology — Open Trusted Technology Provider Standard (O-TTPS)
National Counterintelligence and Security Center (NCSC) - Supply Chain Security Guidelines; Office of the Director of National Intelligence
"Global E-Waste Monitor 2020" – United Nations University, International Telecommunication Union, International Solid Waste Association, 2020
CMMC Guidance - https://dodcio.defense.gov/CMMC/
AI research tools used to gather, analyze, and correlate various meta-data from research documentation and studies: ChatGPT, Claude, and Perplexity
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More Information:
For more information or assistance with these controls, please feel free to contact:
Brent Huston, MicroSolved, Inc.
+1.614.351.1237
Blog: stateofsecurity.com
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