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Looking for some insight into what drives IC price discrepancies across suppliers. Espcially comparing places like digikey and mouser to aliexpress

For example:

I'm looking into buying Maxim Integrated ICs to control LEDs.

I've bought some Dot Matrix modules (with 4 MAX7219 chips each) for around 5 dollars.

On mouser and digikey the hugely popular MAX7219 chips are 8 dollars each. On Aliexpress you can get them for around .60 cents each.

However the less popular MAX6954 are 30 dollars each on digikey, and the same price on aliexpress.

While I know we can only speculate here, I'm wondering what are some of the common causes (I'm new to the world of buying ICs).

  1. Is counterfeiting of ICs a big problem in the electrical engineering world? I know several vendors can make similar chips that do the same thing, or even knockoffs. But, is it common to see counterfeit ICs complete with name brand logos from places like Maxim and TI?
  2. How bad is middleman markup in the IC world? Are prices controlled more by the manufactures or the distributors? Mouser and Digikey seem pretty simliar in price. But Aliexpress is all over the place.
  3. Are there any reputable IC surplus sellers where I am getting surplus parts instead of counterfeit?
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closed as primarily opinion-based by Leon Heller, The Photon, Trevor_G, Chris Stratton, laptop2d Apr 2 '18 at 18:21

Many good questions generate some degree of opinion based on expert experience, but answers to this question will tend to be almost entirely based on opinions, rather than facts, references, or specific expertise. If this question can be reworded to fit the rules in the help center, please edit the question.

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    \$\begingroup\$ The MAX7219 is a fairly non-sophisticated chip, anyone can make one. It should cost few pennies in quantity. However, this IC is useless for real industry, and its use is limited to DYI market, and that's why it is priced so high. \$\endgroup\$ – Ale..chenski Apr 2 '18 at 17:37
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    \$\begingroup\$ @dandavis If a company designs something they don't deserve to have it stolen regardless if its money for "caymen island accounts of investors". My job security relies on IP, so I respect the IP of others. I'd rather not buy something at all if i think it is too expensive then buy a counterfeit \$\endgroup\$ – dprogramz Apr 2 '18 at 20:27
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    \$\begingroup\$ @AliChen thanks for the info. I'm less concerned about buying a IC with MAX7219 features, and more concerned about buying a chip with Maxim's logo on it, that is not made by then. Based on what you are saying, it sounds like the chips are counterfeit or unauthorized. Either way, I'd rather pay 8 dollars a chip then support pirates. Thanks for the help \$\endgroup\$ – dprogramz Apr 2 '18 at 20:28
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    \$\begingroup\$ Most of MAX7219/7221 chips you'll find on eBay or Ali are clones with counterfeit markings. Some details of their behavior are slightly different from the real chips. \$\endgroup\$ – duskwuff Apr 2 '18 at 21:02
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    \$\begingroup\$ @dandavis I release open source as well and often seek open source solutions. I already said I'm OK with other products with the same functionality, but making something and putting someone else's logo on it without permission is theft, not innovation. I don't believe in supporting theft, and open source has nothing to do with theft. Supporting open source doesn't give you the right to steal from people who don't believe in open source (or support those who steal for you), that's something the teens tell themselves when pirating photoshop. \$\endgroup\$ – dprogramz Apr 3 '18 at 13:20
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There is a massive problem with counterfeit electronics, discretes and ICs. A quick search will show this to be the case. Counterfeiters will look at a) high volume, and b) high cost parts as that makes the most "commercial" sense for them. For the MAX7215, the volume is high. For the MAX6954, it's a bit less clear but to hazard a guess I'd say that that's banking on people choosing the MAX7215 because it's so much cheaper.

Your best bet is to buy through retailers, and not through AliExpress or eBay. This is no guarantee, but you're doing the best you can do personally. As to actually identifying a fake in your possession, it's very hard to do non-destructively. You usually only find out when something goes functionally wrong. If it's a hobby project, worst case is you have to replace some parts, but it's a huge issue when building critical appliances.

For example, here is a picture of the die in a fake MJ15004 power transistor. Note the tiny die - there's no way this will reach the rated power before it burns out! Credit to Elliott Sound for the image.

Fake transistor

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  • \$\begingroup\$ As a side note, I just found out yesterday by watching this video youtube.com/watch?v=RijYHMaXcyA that sometimes a fake can behave better than the original part, if the whole circuit has been designed with the fake specs and performances in mind. \$\endgroup\$ – Sredni Vashtar Apr 2 '18 at 18:08
  • \$\begingroup\$ @SredniVashtar That's not correct, as you have designed now for the fake. What if someone sends you the real thing? Always design to datasheet, and be prepared to ask questions when it doesn't work ;) \$\endgroup\$ – awjlogan Apr 2 '18 at 20:59
  • \$\begingroup\$ @dprogramz You are welcome :) \$\endgroup\$ – awjlogan Apr 2 '18 at 21:00
  • \$\begingroup\$ @awjlogan well, I did not design anything, I just observed that it can happen that Chinese kits might require Chinese components (as far as I know, they might even design those kits by trimming potentiometers to select the values of their resistors). It was just an observation of reality, no judgment. As for the fakes, I have always suspected that there is only one transistor type sold on ebay; they just change case and labeling. \$\endgroup\$ – Sredni Vashtar Apr 2 '18 at 21:08
  • \$\begingroup\$ @SredniVashtar I meant "you" in the sense of "one", no judgement made :) \$\endgroup\$ – awjlogan Apr 2 '18 at 21:52
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Any part can be a counterfeit; you must care about source you procure part from - if it will and can be held responsible for the quality of the parts they sell.

I personally always buy parts from such sources, even if I am offered tens of times cheaper with label "good quality". In my projects I need reliability, positive customer experience and least reworks on the hardware.

On mouser and digikey the hugely popular MAX7219 chips are 8 dollars each. On Aliexpress you can get them for around .60 cents each.

Popular parts will be much cheaper, otherwise people will turn to legitimate sources. Note that parts may not be counterfeit as is, they may be a surplus in production, or just stolen by the worker of the plant - so they may appear working properly. But most probably you will get some other chip remarked with one you need - needless to say the consequences of it. I have a friend sourcing from AliExpress, countless of times his designs did not work properly (or at all) and he had to refer to proper sources - losing money and time.

However the less popular MAX6954 are 30 dollars each on digikey, and the same price on aliexprss.

Also logical as they do not have these on their stock and will buy from Digikey or Mouser, and then send these parts to you (in the best case).

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They're probably knock-offs (The MAX7219). The Maxim markings are unfortunate but probably fake.

You can find Chinese-original chips with a similar functionality for a very low price. There are very few volume makers who are going to be paying $5 or more for a simple LED driver chip.

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