How do Supplier Verification Audits Aid Buyers During Current Chip Crisis?

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Chips Disrupting the World 

Supply chain disruptions caused by a mix of geopolitical issues, factory fires at large plants in Japan, and the Covid-19 pandemic have led to severe semiconductor shortages around the world. The drop in air flights to carry chips around the world has not helped the situation. And while all this drama has been busy unfolding, the global chip shortage has also led to a severe uptick in wire fraud.

To start, it’s important to note that there is a limited semiconductor chip supply chain. Chips are only manufactured in a select few countries with specialized technologies for manufacture. Japan, China, Taiwan, and the US, are among the larger chip producers in the world.

Wire Fraud

With buyers – automakers and technology firms among them – desperate to get a hold of chips for their products, a record number of businesses have been unable to find chips through authorized dealers and have instead turned to non-vetted factories, wiring funds for goods that never get delivered. The number of scam victims in the chip sector saw a sharp increase during the pandemic.

Buyers need to protect their interests by auditing their suppliers before making the payment. Supplier verification is an inexpensive way for a company to ensure supplier reliability and save large sums of money.

What Does a Supplier Verification Service Include? 

Ensuring a supplier is genuine before establishing a business relationship is of utmost importance. Your supplier needs to be a registered company with the right production capacity, an effective quality management system, and an ability to provide reliable on-time delivery.

The service ensures a third-party auditor is present on the ground, on-site at the factory, and therefore able to verify the factory exists and can reliably produce what it promises to deliver, at a high standard.

Pro QC has a dedicated checklist for its supplier verification service, which includes photo and observational evidence which is then produced in a report from the on-ground personnel conducting the audit. This includes:

  • Factory/supplier information
  • Certificates
  • Employee information
  • Market and key clients
  • Main product types
  • Production capacity
  • Equipment information
  • Sub-tier suppliers and contractors
  • Quality control
  • Environment and safety
  • Warehouse management
  • Law and social compliance

The Advantages of a Supplier Verification Service

Semiconductor chips are found in products ranging from Wi-Fi-routers to cellphones to automobiles – and make up a large component of product purchases made by sectors including defense and aerospace. In short, chips are critical to a functioning world economy.

Utilizing a supplier audit service can help ensure not only a more flexible, agile supply chain but also reduce fraud and risk in assessing valid chip manufacturers. This is critical to getting goods to where they need to be, and on time. Ultimately this saves the buyer money in both product and protection of brand reputation.

About Us

Pro QC International is a global quality assurance company with nearly 40 years of experience in the industry. We provide global factory supplier verification audits among our range of services. Contact us at for any questions, or to request a quote.

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