Counterfeit electronics undermine the economic competitiveness of semiconductor manufacturers

the University of Maryland Carey School of Law “Debugging the Trademark Laws: The Lanham Act and Counterfeit

Microelectronics,” 31 TEX. INTELL. PROP. L.J. 211 (2023). Hein Online. Accessed via University of Michigan //DH

In addition to the risks they pose to human health and safety, the resiliency of infrastructure, and national security, counterfeit microelectronics exact a huge economic toll as well. Economic impacts of counterfeiting include not only lost sales revenues but also damage to brand reputation, increased customer service and warranty expenses, and costs associated with implementing an anti-counterfeiting program. 76 Exact figures detailing the overall magnitude of the counterfeiting problem are difficult to find,77 but a few published estimates hint at its scope.78 By 2006, it was already feared that legitimate electronics companies were missing out on at least $100 billion of global revenue every year because of counterfeiting. 79 A 2014 analysis concluded that 1% of all semiconductor sales involved counterfeit products.80 More recently, the counterfeiting of electronic parts was estimated to have cost U.S. semiconductor manufacturers approximately $7.5 billion in 2018.81 Integrated circuits accounted for nearly 70% of those fake parts, valued at $5.24 billion.82