The electronics counterfeit monitoring organization ERAI (formerly the Electronic Resellers Association International) has issued its annual global trend report. The report shows an overall increase in electronic components, while incidents of counterfeiting decreased. Per ERAI:
The 2025 ERAI Annual Report indicates a decline in the total number of parts reported to ERAI compared to 2024, marking a notable departure from previously observed trends. Historically, fluctuations in reported parts have closely mirrored global semiconductor sales; however, in 2025, reported parts decreased by 29.1% despite a 25.57% increase in global semiconductor sales.
According to the report, programmable logic, analog, microprocessor, and memory integrated circuits (ICs) remain the components most subject to counterfeiting.
ERAI relies on data provided by industry stakeholders, manufacturers and participants. Just over 38% of reports came from US-based organizations, with the rest reported by other international sources. The two primary providers of counterfeit information are distributors and test laboratories.
The ERAI data is then used by aerospace and other industries to help them avoid purchasing counterfeit components for their own supply chains.
The report struggled, however, to attribute a cause for the decrease in counterfeit. The report’s author, Damir Akhoundov, surmised that AI might be a factor, but provided no evidence to support it:
One possible explanation is that approximately 35% of industry growth in 2025 was driven by demand for high-end AI-related components, which are more difficult to counterfeit due to their complexity and regulatory controls.
ERAI failed, however, to account for efforts made by the Chinese government to crack down on counterfeiting. In China, the efforts are covered under intellectual property (IP) regulations, which have been dramatically tightened in the past two years.
Since 2025, China has processed over 31,000 criminal cases related to counterfeiting. According to China Daily:
In one case released by the ministry, Shanghai police resolved a chip technology trade secret infringement case in July 2025 through the police-enterprise mechanism, with detention of 18 suspects and seizure of many servers, mobile phones and computers. Police found that a suspect surnamed Ran and others had set up several companies and recruited former employees of the rights-holding company by offering high salaries and equity incentives and allegedly used the stolen technical secrets to develop similar chip products.
AI may actually play a role in the identification of counterfeits in China, not simply in increasing the difficulty of producing counterfeits. The government announced various “Smart” initiatives which use AI and other technological approaches to “achieve automatic discovery of infringement leads, automatic generation of risk factors, and automatic control of high-risk goods.”
In 2025, China’s General Administration of Customs launched a program called “Special Action for Customs Protection of Intellectual Property Rights to Stabilize Foreign Investment.” In that same year, China amended its Anti-Unfair Competition Law, increasing punishments for digital platforms selling counterfeit products.
The year prior, in 2024, the State Administration for Market Regulation (SAMR) launched a campaign called “Tiequan” (Iron Fist) targeting key industries subject to counterfeiting, such as electronics. That same year, the Shenzhen Administration for Market Regulation conducted a special operation in the Huaqiangbei electronics trading area, resulting in the seizure of counterfeit chips and discrete components and the shutdown of sellers of remarked or refurbished components.
Contrary to popular belief, China suffers from the counterfeiting industry and does not benefit from it, losing billions of dollars in revenue each year. A 2003 report found that “almost one-third of the foreign-funded enterprises say that counterfeiting directly affects their expansion plans,” and that “Chinese authorities have already recognized that the continuing flow of counterfeit goods is damaging China’s international reputation.”
