According to Reuters, ERAI, a private information service organization dedicated to monitoring, investigating, and reporting disputes and complaints in the electronic components resale market, said it received 101 cases of fraud in electronic components transactions last year, exceeding 70 in 2020, and much more than 17 five years ago, reflecting that the global chip shortage has made the electronic components market more chaotic.

Mark Snider, president of ERAI, said companies looking for chips they could not find through authorized and vetted distributors were trying to buy them from shadier brokers and transferring funds for goods that never got delivered.

It is worth noting that 504 cases of counterfeit chips were reported to ERAI in 2021, although this number is higher than the 463 cases in 2020, but much less than the 963 cases in 2019.

Snider said China’s pandemic-related shutdowns could be making it harder for counterfeiters to operate and also said counterfeits are increasingly more sophisticated, evading detection.