By Ruari McCallion
The Manufacturer
July, 2005

The European Union is implementing legislation that will have profound implications for electronics manufacturers across the world. Ruari McCallion found out what they mean and how ready US manufacturers are

If the initials RoHS (generally pronounced “rose”) mean nothing to you, then you’re not alone. A survey undertaken in the latter part of 2004 by the IEC found that 57 percent of respondents in the US had no idea what RoHS is, never mind what it covers. The acronym stands for “restriction of hazardous substances” and it relates to a directive that will take effect in the European Union in July 2006.

The Restriction of Hazardous Substances in Electrical and Electronic Equipment Directive is probably the biggest challenge facing the electronics sector in the immediate future. From July 1, 2006, electrical and electronic equipment sold anywhere in the EU countries must not contain any traces of certain defined hazardous substances, namely, lead, cadmium, hexavalent chromium and mercury, and brominated fire retardants. Certain sectors have exemption: defense is the main one, but the exemptions only apply if every element is exclusively for the exempt purpose. The practice of COTS—commercial off-the-shelf supply—means that exemptions will be severely limited. A computer is a simple example: very few are totally and exclusively made from materials that are produced solely for defense. It doesn’t make sense for a commercial operation to do so. Aircraft guidance systems will likely have parts in common across civil and military lines. Likewise, radar. Some health applications are exempt—but monitoring devices will, very likely, have PCBs and maybe other components that are used in non-exempt situations. All things considered, it may be best to proceed as if exemptions simply didn’t apply. Alternatively, set up different lines for exempt and non-exempt products. The question is: does that make economic sense? And should you still be at the stage of thinking about it?

“RoHS represents a sea-change, and the perception is that corporations still don’t have a good grasp of what it is,” says Maxime Elbaz, general manager of the Underwriters Laboratories (UL) Restricted Substances Compliance Solutions Program. The financial scope of RoHS is huge: Eurostat, the Statistical Office of the European Communities, has calculated that the value of imported products subject to RoHS is in the region of roughly $120 billion a year. The restrictions are far-reaching, particularly in the most common item in electronic equipment: solder. Lead solder has been used in electrical components for decades. Lead-free solder is a recent development, and there are reasons why it hasn’t been widely adopted. There are three main types: tin/copper; tin/silver/copper and some alloys containing beryllium. The metals themselves are more expensive than lead but that isn’t the main concern, nor the principal source of increased costs.

“Lead solder has been used because it melts at a low temperature and, when it cools, it gives strong connections,” says Victor Viveen, product marketing manager of Omron Electrical Components, Europe. “Lead-free solder melts at a higher temperature, which means that it needs more energy.” There are consequences.

“All the components connected by the solder have to be able to withstand higher temperatures, too, and still be reliable,” says Alan Pamphilion, environmental systems coordinator with the English company E2V Technologies. “We have to use much more accurately temperature-controlled ovens and soldering irons and the materials we work with need to be more tightly controlled, to operate within tighter temperature and specification ranges.” Unleaded solder is less flexible and so there’s greater likelihood of cracking and stress damage—but there are some companies that have been working on the subject for several years and have developed reliable replacements. Hitachi is already fully compliant, led in part by developments in Japan, which has a code of practice at least as stringent as the EU’s legislation. Aavid Thermalloy has undertaken a comprehensive review of all its products and suppliers but has found that the requirements of some customers for a variety of material declarations/disclosures has become quite onerous. LTK Industries, a provider of cable and wire products to the electronics and communications industry, used UL to ensure its compliance. The fact that it did indicates that the issues inherent in RoHS go beyond PCBs and internal components.

“LTK has been focused on getting ready for RoHS and WEEE [waste electrical and electronic equipment directive, already in force in the EU] for the last few years,” says Peter Ford, LTK’s director of business development for North America and Europe. “In any supply chain issue, we have to have our processes in place and push them down into our supply base. Whether it’s plastics or whatever else, we insist that our suppliers have compliance.” He finds that some suppliers—and customers—are further along than others, but that the timescales are greater than may be appreciated.

“It depends on the complexity of the products,” he said. “In our business—wire and cable—you need 12 to 18 months to ensure compliance is fully in place.” Add to that production and delivery lead times and—with RoHS just a year away—some companies may have left it rather late.

“Some companies haven’t been paying attention and won’t be able to comply,” he continued. Achieving technical compliance won’t be a matter of pulling an all-nighter: the materials present challenges. “There are a lot of lead-free solders around but they aren’t as conductive as lead. They’re more brittle: even in cables, lead, as it reacts with other substances, acts as a stabilizer.” Having said that, the fruits of its program over the past few years has enabled it to achieve the same standards of performance without the hazardous substances as it did with. “We’re proud of the fact that we’ve had a program in place with UL for the past two to three years and are the first cable company to have achieved approval from UL for our RSCS implementation,” he said.

UL discusses four options to corporations seeking to become compliant. The first is to push responsibility down the supply chain. The second is to accept suppliers certified by other OEMs. The third is to build an in-house compliance organization. The fourth is to use third parties to assist in the process. Companies shouldn’t think for a moment that having a supplier’s declaration will satisfy the EU if a product is found to be noncompliant.

“The authorities will always go after the organization with the deepest pockets, and that will almost certainly be the OEM,” Elbaz said. The cost advantages may look attractive but it hardly provides a safe haven. Accepting other OEMs’ suppliers as compliant is really inexpensive but it exposes the manufacturer to a lot of risk—not least, the likelihood that a competitor’s compliance procedure may not cover your own areas of operation. An in-house organization may not be within large companies’ core competencies and direct costs are rather high. On the other hand, it does give a high degree of control but, UL, argues, the third-party route is likely to be the optimum solution, for a number of reasons. First, external auditing is already a familiar process; second, the external organization is likely to be able to bring benefits of scale—and global benchmarking—to the process. And third, external approvals and certifications tend to have higher credibility.

WEEE, which deals with disposal of electrical equipment in a similar way to the EU’s Vehicle End of Life Directive, is already in place in major EU countries, including the UK. Inevitably, it has already had an impact: major manufacturers, like Dell and others, are adding up to $10 to the sale price of products, to provide a fund for future disposal expenses. It’s the company whose name is on the box that’s ultimately responsible for disposal, so tracking and tracing throughout the value chain – right to the end of life – is becoming essential. That’s where IT comes in.

“RoHS is a procurement and design issue,” said Chuck Cimelore, CTO and president of Omnify Software. “There’s a need to classify and quantify data and identify the composition of parts right down to the element level.” Is the requirement then, in effect, for a PLM solution?

“PLM can help address certain issues,” he said. Some vendors have added modules to their software: others, including Omnify, come at it from a different angle. “We’ve adopted a mathematical approach. The customer wants to be able to define their own parameters—which will differ, depending upon where they’re shipping, for example. There is also the need for an efficient storage mechanism so that, when an authorization bureau comes in, they can show that every part is compliant.” Adopting this approach can help to identify approved components early in the design process. “It drives engineers to be more diligent—and it adds structure to the process.”

So, it isn’t all bad news. The European market is worth billions of dollars; so is the Japanese. And various states—California, particularly—have started down the same road. A company that hasn’t begun addressing the issues has left it very late, but there are routes to help get there quickly.

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