Electronic Products Forum

Is the electronics industry prepared for the RoHS directive?

As most engineers are very aware, the European Parliament and the Council of the European Union RoHS directive goes into effect July 1. Are both the component suppliers and the OEMs set to take on this environmental challenge?

We recently spoke with seven industry leaders on this important topic. Below is an edited full transcript of this conversation.

Electronic Products : Let us begin with introductions.

Ken Farrington

Ken Farrington : I'm with Texas Instruments in Dallas and I'm the Pb-Free Program Manager in Business Operations, Semiconductor Sales and Marketing.

Susan Fischer

Susan Fischer : I'm from Newark InOne I'm the Senior Vice President of Marketing. We're a leading distributor of electronic components, test equipment and RoHS compliant solutions with locations throughout the U.S., Canada, Mexico and Brazil.

Steve Schultz

Steve Schultz : I'm Director of Strategic Planning at Avnet and I'm also the Program Manager for our lead-free initiative. We are an electronics distributor that offers world class design chain and supply chain services.

Gino Nanninga

Gino Nanninga : I am Vice President of Sales and Marketing for Positronic Industries, a manufacturer of high performance, high reliability connectors. Our headquarters is located in Springfield, Missouri.

Marshall Hulbert

Marshall Hulbert : I am Engineering Manager at Sullins Electronics in San Marcos, CA. We have been manufacturing edgecard and header connectors in San Marcos since 1971. We specialize in providing products that are geared to specific customer designs, without prolonging lead times.

Omar Ahmad

Omar Ahmad : I am President of Silicon Expert in Santa Clara, CA. We manage a database of electronic components available at www.siliconexpert.com. We have about 80 million parts, active, passive, or electromechanical, in our database and we monitor RoHS information and convergent dates.

Gerald Waldron

Gerald Waldron : I'm the Director of Sales and Marketing for Libra Industries. We're a contract manufacturer located just east of Cleveland, Ohio, and we have partnerships with SMT in Hong Kong.

Electronic Products : What can we say about the status of U.S. component manufacturers RoHS compliance?

Omar Ahmad : At Silicon Expert we recently did a survey of about 500 suppliers in the US about how ready they are for RoHS compliance. We found that almost 70% of suppliers feel they are pretty much ready for the July 1st compliance date. And we found that 71% are changing their part numbers to reflect RoHS compliance.

One issue is the detailed material data. Basically they are converting the products to RoHS compliant, but they have an issue with supplying complete data on the packages and the homogenous materials of those packages.

Susan Fischer : We are finding the same thing�manufacturers maybe in the process of converting or half-converted, but there's a separate issue of the ability to provide information and what's actually being shipped to the OEMs and the distributors that is just as complicated a process as the actual change in production. And, we need to know if the part is backward compatible.

Gerald Waldron : One of the keys, for a contract manufacturer, is there may be a part with the compliant part number and a certificate of RoHS compliance, but many manufactures are lagging in providing peak reflow temperature and tolerance and the moisture handling rating�which really puts us in a tough spot.

Steve Schultz : We too did a survey of our suppliers and the number we came up with was 72% are ready. But it's a little more complicated than just looking at that manufacturer and saying they're changing the part number or not. Often, they'll have a combination or they just do a certain product family.

Or a very large supplier has multiple factories all over the world, some of which have different approaches on it. So that gets very confusing and it impacts that labeling and documentation issue dramatically.

Ken Farrington : Do you use labeling on the boxes or are you working off a database or do you use both sort of as a safety check?

Gerald Waldron : When an client hires us for design services, to do the actual research and conversion for compliance, we're going to be going off the published data.

Now, we have instituted what I'll call extraordinary measures during incoming receiving to be cognizant of packaging labeling because that in many cases is our first flag, particularly for those 29% of the parts that are not changing part numbers, for us to be able to at least segregate conforming versus non-conforming inventories.

Susan Fischer : At Newark InOne we are doing both, and we are finding some discrepancies because there is a lag time between when a manufacturer converts over and when the inventory actually gets run down. So we need to ensure that even though the compliant product is being manufactured, it is in fact compliant parts that we receive.

Marshall Hulbert : We had to do the same thing�where, as a component manufacturer, we've got to segregate all of our leaded inventory.

And we've found that it's very critical to get the data on out RoHS compliant parts to OEMs, and the distributors are often wanting the exact chemical analysis and things like that. It's actually rather tough to keep up with information requests as they come in.

Electronic Products : So it seems the component manufacturers are not quite ready yet�but getting close?

Steve Schultz : We believe that the majority of our suppliers are either ready or preparing to be ready on an aggressive time frame. There are a few out there that are struggling with this issue.

But there are some complicated side issues. In our European operations, the timing seems to be different. Their customer base is converting over much faster than in the Americas, and there is a perception�a very real perception�that many manufactures are redirecting their leaded product back into the Americas because they can't move it in Europe right now, so that's a concern.

Susan Fischer : our European division, we're seeing the same thing. They seem to be a couple of months ahead of where the North American manufacturers are.

Omar Ahmad : The manufacturers are converting their product but they're having a difficult time supplying the data and the due diligence to prove that they converted the product.

Electronic Products : And the data issue turns out to be a bigger issue than the parts. Did TI convert all your parts?

Ken Farrington : TI is pretty much finished with the conversion effort and now we're waiting to see what happens at the beginning of the year. And the comments earlier about the American activity lagging Europe, we're seeing the same thing.

The data problem isn't going to hold up revenue, it just creates an uncomfortable situation for the OEMs from a due diligence standpoint, but that gets into what's actually going to happen on July 1st.

So, I think like a lot of people are saying, most of the manufacturers are finished, but of course from an OEM's perspective, it only takes one part to hold up a board, right?

Electronic Products : The non-compliant components�there seems to be mixed feelings about those components. They might be a rare commodity and you might see a price rise on them, and then other people say they're going to be no good after a while, you have to throw them all away. What's your perspective on that?

Susan Fischer : We are not planning on doing any price changes. We've seen some from manufacturers, small ones here and there.

My impression is that right now the industry is so focused on getting the paperwork and the due diligence part right, that pricing as of yet hasn't become an issue. I expect there may be fire sales and/or price increases on some non-compliant parts.

Steve Schultz : We have the same perspective. We're not passing along or adding any premiums to any of the products.

We do anticipate that for the leaded product you'll see some prices increased by the manufacturers as the economics models producing a product that has less and less demand on it.

It seems that we are spending, over the last month or so, a disproportionate amount of our time talking to those military and other customers that want to have assurances about the continuous supply of leaded products, and letting them know what's happening in the supply chain�what their options are associated with it.

The portion of the marketplace that have exemptions, and thus thought they were immune from the impact of the supply chain related issues, have woken up to this problem and are looking for solutions. And I think that some of those solutions are going to translate into higher prices.

Susan Fischer : Agree, Steve. I don't know if you're seeing this, but we're seeing some of the exempt customers requesting Mil Spec product as sort of a safety valve, plus we're getting a lot more requests for “you are only allowed to ship products with these characteristics”. Many of the characteristics we can't get from the manufacturers because it is things like lead composition and overall material mix.

Steve Schultz : We're in the same boat.

Electronic Products : So it is not just moving to RoHS compliant, it's also what the materials are so that when you actually do the processing, you know what process temperatures you need and so forth.

Susan Fischer : And not just some customers requiring the RoHS compliance, but some customers saying I want you to guarantee me it is non-compliant product.

Gerald Waldron : We do some military business and the comments I've heard are very true there�with the absolute requirement to remain with eutectic solder technologies and finishes.

But what's very interesting in our business where roughly about 1/3 of our clients are in the medical devices in market, another third roughly are in the, what I'll call, high reliability and machine control systems, both of which, depending on your interpretation, could be considered to be exempt applications.

They are actually the most active that we have in working towards compliance. They have such long product life cycles that they're taking the approach to be proactive as opposed to reactive. So we actually have in our experience, more of the customers that are exempt doing full due diligence. They're not just changing a bill of materials and running a quick pilot sample to check, but they're going through a full reliability evaluation because there really is a lot of uncertainties, as some of the later questions in our discussion today are going to point out, relative to the reliability, tin whiskering etcetera.

Electronic Products : How many suppliers, both integrated circuits and passive components, are moving to 100% RoHS and you can't get the leaded parts anymore, versus having both available?

Ken Farrington : We've had less of an issue on those type of requests because of the type finish we use. The people that have the high-reliability type applications or medical need to be cautious. Almost all of our lead-free solutions use nickel-palladium-gold, which is backward compatible and doesn't have that tin whiskering risk.

Steve Schultz : If the manufacturer chose not to change a part number because at some point in time they just converted their processes over to lead free, those are the ones that you have the issue with right now.

For the most part, if they've added a new part number to show the RoHS version or lead-free version, it's usually still available in the leaded version at this point in time.

Electronic Products : And is it still available because there's still some stock or are they going to keep making both of them?

Steve Schultz : I think they're making them now and they're evaluating it very closely. We are receiving a lot of obsolete notices on part numbers.

But I think that manufacturers who are actually changing part numbers, they continue to do it and evaluate it very closely. At some point they'll get to a decision point where it's no longer economically beneficial for them to build the non-compliant and they'll obsolete that part.

Electronic Products : Do connectors have the same issues?

Gino Nanninga : Well connectors, in general, are not quite as complicated as some of the other devices, as far as lead-free solder goes. But as far as some of the other materials within the components of the connector, such as lead and other of the banned substances, those will be transparent.

If I have lead in alloys that used to make the contact, as long as it meets performance requirements and is under the small amount of lead that is acceptable for the RoHS directive, then that's transparent to my customer.

Electronic Products : So you don't have much of an issue of going between the two and once you go to lead-free, everybody will just use it?

Gino Nanninga : We did change our part numbers. We have a suffix on the end. And we are going to continue to manufacturer products that do not need to meet the RoHS requirements.

Primarily, to use up inventory of components that are not RoHS compliant. But then, I'm going to draw some conclusions because there's been a lot of good discussion that I'm in agreement with, we do quite a bit in areas of the industry that do not want anything changed.

They do not want us to switch everything over to RoHS compliant, discontinue or change the recipe of the product that they've been getting.

Electronic Products : And that's because they are afraid it may cause problems.

Gino Nanninga : They don't know yet, but yes. There's long-term reliability issues�whiskering, all these things have been mentioned in this discussion. And until they get to the place where they thoroughly check this out, they would prefer nothing change.

I want to go back; I think that there's another issue that goes along with the pricing issue and that is delivery, and this kind of moves into your next question, the status of US OEMs, and I agree with Susan, we are seeing a lot of variance with our customer base regarding knowledge of RoHS and where they're at in the process.

A lot of the larger companies that we deal with have been working on this for a year because they've got resources and they tend to stay ahead of the game.

But, some large companies are not following through well on RoHS programs they have set up; and medium and small companies�we're getting calls currently from companies who are basically asking us “what's this RoHS thing all about?” And we get to educate them.

Electronic Products : Oh my, you're still getting calls like that? Have other people heard the same thing, that OEMs, a significant number of them, haven't even started the process yet?

Susan Fischer : I would say that that most everybody is at least somewhat aware, but whether they've started the process or not is another question. We've also done some surveys in between July and November, we found a 10 or 20-point increase in the number of customers that were doing stuff.

Steve Schultz : Several months ago, it seemed that the majority of the communications to the customers were what I would call the general awareness seminars, road shows, sending them out presentations, a how to list, etc, and that has dramatically dropped off. Although we still see customers who are just waking up to this issue, but that's a rarity for us right now.

Susan Fischer : And we do think there's going to be a huge waking up in January.

Steve Schultz : Yes, and let me underscore why I agree with you 100% on that. Right now it appears that most of our customer base understands the transition and that there's a need to move forward with it. We're overwhelmed with request for component data. But, it's a small percentage of those customers that are actually only ordering lead-free or RoHS.

Gino Nanninga : I agree with that also. And I agree with the comment that there's going to be an awakening as we move closer and that's where I was getting back to my point on delivery.

At least from our point of view, we have to shift our component inventory and manufacturing from products that don't have to be RoHS compliant to products that do.

We already have RoHS in the pipeline. But we do not have a clear forecast from our customers as to what their usage is going to be for certain going forward. But as these customers start waking up and really start deciding they need to order RoHS compliant, there could be some shortages coming up as the industry moves production in that direction.

At least from my point of view, that's one of the most serious issues we're dealing with. We're building RoHS. We have all the paperwork down. We're ready to take orders and fulfill everything with the customer base. The customer base just is not at a point where they can all tell us what they're going to need.

Gerald Waldron : For those companies that know that they are going to transition to full compliance at some point in the year, I am seeing those OEMs manage their open order backlog with us much more tightly, which limits the visibility that we pass into our supply chain.

So if everybody that's switching starts doing that, you're going to get less of a long-term needs picture than you normally would.

Omar Ahmad : I wanted to highlight another issue that also for the mechanical parts. The screws, the labels, they all have to be compliant, and they sometimes don't have a part number, they order per description, and most of the times they order through a distributor who has their own labels on them, and a lot of OEMs are having a difficult time getting compliance data on these parts.

Because it's not only the ICs, and passives that have to comply, but also even the labels, the ink�everything else must comply. Many of these type of suppliers haven't even started doing anything about RoHS data.

Marshall Hulbert : We switched over, and we've been educating people as they order that we have switched over to lead-free. The problem we have to supply the company that wants the non-conforming leaded part, is the lead time that they're requesting. It's basically switched over and we have trouble getting leaded parts.

We've had lead-free parts available the last 20 years, but it was a very, very small portion of all the parts that we sell until lately; now it's completely the opposite. Getting the leaded parts is the hard part.

Marshall Hulbert : Yes, a couple of the telecommunications companies just don't want to change. They would need to do a lot of testing�they say one to two years. And because they feel they're exempt, they want to keep the leaded parts.

So they're taking their time. But, at any time, the EU or even California can say, “Okay, telecommunications isn't exempt anymore.” And I'm worried that they'll be not far enough ahead to be able to switch over.

Electronic Products : How do we quantify what percentage of OEMs are ready now?

Steve Schultz : When we did a study just a few months back, that number was about 8% of our customer base.

8% are ready and have made the changes, as opposed to being in process of migrating over. And I don't think it's increased much beyond that. I've also heard discussions from the people that manufacture the lead-free solders that are concerned that the marketplace is still asking predominantly for the leaded solders. And so, I would say that the overwhelming majority haven't converted yet.

Susan Fischer : I would say, however, that a large majority are somewhere in that conversion process.

Steve Schultz : Right.

Electronic Products : What percentage do you think are just burying their head in the sand right now, and they don't have time to worry about it right now?

Susan Fischer : Trying to translate and take out the MRO type customers who aren't actually manufacturing, I would probably say that for the manufacturers that's relatively low, maybe 10% or 20%, and it's skewed towards the very small customers who don't have a lot of international business. That's a very rough estimate.

Steve Schultz : If I had to guess it would be in that range, probably on the lower side of that.

Omar Ahmad : Because most of the OEMs are converting their products as we speak.

Steve Schultz : I think if you have a larger company that has multiple (assembly) lines they have chosen a line or two to convert over and they're migrating that now.

But they have other lines where they're buying the same part and they want the leaded version of it which makes the buying task very, very difficult and makes the inside sales task for distributors a very difficult job.

Electronic Products : I'd like to talk about Pb-free devices being backward compatible and how big an issue that is.

Especially I think ball type ICs are a big issue. I know TI has converted all their parts already, but are ball parts going to be backward compatible?

Ken Farrington : No. And that's pretty widely accepted in the industry that you don't want to mix and match BGAs. That is where OEMs have to be very careful about their BOM planning, supply chain, and managing lead times because in some cases they'll find that the lead-free BGA versions have longer lead times and so you can't just stop and start real quickly. They'll tend to plan everything around the logistics of the BGA devices or anything else that falls into that same category of don't mix and don't match.

Gerald Waldron : Absolutely. We've even had several instances and done some tests with clients and it has been well documented, and it is in the literature, that the area-array package devices are the�what I'll call the “got-cha.”

But I think, as was just cited, it becomes a logistical exercise. We have created our own part numbering systems, not only just for whether something is compliant or not, but there are some vendors declarations that are not RoHS compliant, but simply to be a lead-free component, which is only one piece of the six materials required for compliance.

So, we actually are taking a very conservative approach for our clients in categorizing the parts and do an engineering review through our component engineering group relative to anything that has a BGA on it. We flag those items for special consideration.

Electronic Products : So, excluding the BGAs for a minute, the rest of the parts are backward compatible. So, if you have an old line you can put those lead-free into the standard process. Is that true?

Ken Farrington : Yes. And it gets back to the discussion earlier, you may run across some OEMs that are very specific and that they don't want a matt tint Pb free finish accidentally getting into their old products. So, they're sensitive to that. They do not want to change what is working.

And so, they may make that request�beginning January 1, only ship me lead-free for this product, but I have to have leaded for this other product.

Steve Schultz : We get that question a lot and my answer to customers is, the manufacturer represents it as backward compatible, but our general statement is, we believe that the customer's engineering department has to evaluate the part, make a determination and you can't get away from that engineering responsibility. And there are enough concerns out there that would merit that prudent evaluation.

Electronic Products : Have you heard from OEMs that have products that they've been making for 10 years, and now this RoHS comes along�and now they are talking about discontinuing it because they don't want to spend the effort to convert it?

Susan Fischer : I haven't heard any OEM say that, but I've heard some of the engineers assume that. It would seem they're not far enough along to know what they're going to discontinue, but they are working with the products that have to be converted and go on a priority list.

Gino Nanninga : I agree with Susan on that.

Electronic Products : I think that's another surprise that's going to be showing up, though. I'm afraid that somewhere later in the year, there's going to be a lot of products that are no longer manufactured just because OEMs don't want to spend the effort to change them over.

Steve Schultz : It's a classic supply demand issue out there and the cost of making the conversion. The volume isn't there, the economics won't permit them to continue with it.

Omar Ahmad : But it depends where they ship the product. If they ship it to the US, then they're largely not a concern today, but if they ship to Europe, they're probably in a hurry to switch.

So, the big OEMs are switching all their products because that's the most economically cost effective way to do it, because they don't want to have two lines. But the smaller ones, they are figuring out if they ship most of their products to the US and they are not too concerned; if they ship to Europe, they are switching. If they are in between, they're making the assessment, should they cancel the product and do the next division with RoHS compliance, or just to stay with that?

Ken Farrington : You have to remember they're not only considering the RoHS challenge, but it's the WEEE challenge as well. That creates a huge logistics burden for some small companies that may make that product life decision very easy, where they say, “Hey, we can only deal with three new products next year. We've got to can the other six because of it's WEEE stuff”�the recycling that goes hand-in-hand with RoHS.

Electronic Products : Why is that different from RoHS?

Ken Farrington : Well, it's a whole infrastructure issue or logistics issue. You have to register products. In some cases, you have to pay registration fees. You have to identify recycling programs that would allow your products to be returned or recycled through a third party recycler.

So, it's not just the lead-free or the RoHS issue, you also now have to worry about the whole recycling logistics that a lot of people didn't have to worry about before these two directives came along.

Omar Ahmad : That's right. And if OEMs, right now, are not ready for RoHS, they're not very ready for WEEE.

Susan Fischer : And that doesn't count some of the state legislation activity that we're starting to see that seems to be more balanced toward the WEEE rather than RoHS.

Ken Farrington : You really have to look at RoHS as a subset of WEEE. A company has to be preparing for WEEE and RoHS. But it's really WEEE first. You can't go into Europe without it.

Electronic Products : My feeling is that at a lot of OEMs at the executive level are saying, “You know what? We're going to make the big conversion. We'll convert all products over to lead-free and let's charge out there and do it.”

And then when they see the realities of this old product that they have to redesign and different issues coming up, they may end up with both compliant and non-compliant products.

Susan Fischer : I would say so, and as we get into next year, a lot of companies are going to find this takes a lot longer than they think. So, whatever plans and schedules have been laid out as those get revised, you're going to have to kind of do triage on which products you want to focus on and have to.

Gerald Waldron : I can clearly see this in some of our smaller OEMs as they try to tackle the problem�that's where our design group is getting significant interest in sustaining engineering contracts.

Electronic Products : A lot of people have a lot of fear about reliability of the new components, but I don't think that we've really heard much in the way of actual problems.

Steve Schultz : We heard a few small customers of ours that had issues early on, but they were able to resolve those problems once they understood the issue better.

It had to do with their own temperature profiles or some misunderstanding.

Electronic Products : Some people are saying that the higher process temperatures alone might cause problems with other components.

Ken Farrington : I think most people have the recipes figured out. There's going to be the typical learning curve, lower yield on the board in the beginning, that might drive their cost structure up a little bit, but it looks like all the board guys are getting that under control.

Electronic Products : Let's talk a about what's going to happen on July 1. If I'm an OEM and I'm making a product and, shipping a certain percentage of it to Europe, what do I have to do to be ready and what's going to happen? Are they going to take my products and tear it all apart and measure everything or, if I have one little conformance sheet for each part, am I going to be okay?

Steve Schultz : The surveillance is a country-by-country responsibility. And there won't be uniformity across the entire EU on how the individual countries are handling those items.

At Avnet, we think the biggest issue will be competitors of those OEMs making complaints that their product isn't compliant on that, that will trigger the surveillance. And we think that will be the first issue out the gate.

Ken Farrington : I agree. I don't think there's going to be a big set of news headlines on July 1st. It's probably going to be pretty anti-climactic that people will continue to ship their products into Europe because it is the foundation of the directive that you're assumed to be compliant.

So, some time will have to go by and then perhaps a competitor will find a situation where supplier ABC was asleep last year and was hoping to just ship stuff in, and they didn't register for WEEE, and a competitor decided to pass that information on to the country so that they could increase the surveillance on those products.

Electronic Products : So on July 1st, I don't have to add any paperwork to the box that I'm shipping into Europe?

Ken Farrington : Nope. It's just business as usual. The paperwork comes into play if you get audited basically. If there's a reason for concern, then one of those countries can request your documentation where you have to prove that that product is 100% RoHS compliant.

And again, you also have the same issue with WEEE. You have to have the product marked appropriately for recycling.

Steve Schultz : And they allow you a certain amount of time to pull that information together�roughly a month.

Electronic Products : And so let's just take an example. I make a product and I have it RoHS compliant, and I have a soft copy single sheet that says it's compliant for every single component. I ship it into Europe and for some reason, they pick on me to do an audit.

So, what they're going to ask for is, send us copies of those sheets of paper, right?

Ken Farrington : Right.

Electronic Products : And then, I'm good?

Ken Farrington : Yes. And they're probably going to highlight where they're suspicious, for example they have one of these handheld scanners and the metal bracing around the product was reacting as if it had lead in it.

So, they might actually be very specific and say, we need the paperwork on the case. They don't want the three-inch thick file�they just want your documentation on the case.

Susan Fischer : Now we're seeing, at least in the U.K., requiring due diligence, “reasonable steps” and you could interpret whether just getting a C of C is a reasonable step, or we've got a number of steps we're doing. We're assessing the manufacturers by risk.

And then, for the high-risk manufacturers, we may be doing some additional testing. So, just by having a piece of paper and taking things that they value may not be quite enough for the due diligence requirements.

Ken Farrington : That's right. You have to have the risk assessment of suppliers' pieces in there as well.

How are you making a determination of who's a risky supplier?

Susan Fischer : We've got a whole list of criteria in terms of reliability of the supplier. And in some cases, doing some testing out on our own. We're changing our part numbers whether the manufacturer changes their part number or not.

Electronic Products : So, Susan�Newark InOne is changing their part number?

Susan Fischer : Yes, whether the manufacturer is or not. It's the only way we can actually physically keep our compliant and non-compliant inventory segregated.

Electronic Products : If we have a manufacturer that doesn't change the part number and I have a piece of paper saying, “This part number is lead-free,” how do I really know if that part is compliant?

Susan Fischer : Exactly. And that's taking a lot of time and a lot of coordination with the manufacturers to make sure, particularly for those that aren't changing their part number, that what we're being shipped is compliant.

Ken Farrington : It becomes a date code headache, right?

Omar Ahmad : Exactly. The date code will be the key. I think that's a nightmare that those suppliers who do not change their part numbers are creating in the industry. And that's why distributors are forced to create their own part number, because they have parts that have been switched to compliant, but maybe this is old product that is not compliant.

Susan Fischer : And this relates back to “what does that due diligence mean?” We're taking the position that it's above and beyond just taking the manufacturer's word for it and downloading something off of their Web site that says, “We're making this part compliant.”

Electronic Products : But that piece of paper that they send, the compliant sheet, that has to have dates codes on it.

Susan Fischer : Some may, some not.

Steve Schultz : You'll probably see the small EOMs just go with the RoHS “Yes/No,” and then the bigger OEMs drill down another level because there is greater financial exposure. And you may have a published date of conversion by a manufacturer. And that manufacturer may be making that in two different plants globally.

And one plant doesn't make that date or something happens as a result of their own schedule problems or supplier problems. And now, the date that they have passed along from the one plant is not really correct.

Susan Fischer : We have actually had some manufacturers who have given us the data that this is compliant and then changed their mind.

Ken Farrington : That's why it's so critical to have the unique part numbers because if the supply does get tight next year or are jumping channels to find products, boy if you're trying to manage the old part number and have different people look at date codes, you're really rolling the dice there.

Gino Nanninga : When you get info from your manufacturers do they just send you a certificate of compliance (C of C) or do they supply you with the actual breakdown of various types of material?

Susan Fischer : It's all over the map. We have some manufacturers that we're having a very difficult time getting additional information from and others it's a dream.

Gino Nanninga : What we do is supply a certificate, but upon request we will supply a full material breakdown.

Electronic Products : So, what should a design engineer look for – what level do they need to have?

Gino Nanninga : If, after surveillance becomes an issue in the future I just know that we want to be in a position to show not just that someone said it's compliant, but to be able to show how it's compliant.

Electronic Products : And that's a big question I think for the OEM�should they go to that trouble or should they just get their little conformance sheet and not worry about it?

Omar Ahmad : I think they should – OEMs should get full material disclosure for a few reasons.

Number 1, they can catch any errors with a “yes, no.” It's easy to make a mistake with a part. But if you have the full material declaration and the content – the homogenous material declaration, then you would know exactly.

Number 2, as the regulations are evolving and the exemptions are not permanent, if anything changes with the exemptions status, let's say in 2009, 2010 or a new material has been added or deleted, then if they don't have the full material declaration, then they have to go back to the suppliers and ask for the data again.

Susan Fischer : We're seeing it in a couple different levels. The C of C is more a quality assurance paper trail document. The lead composition in peak reflow temperature is more of a manufacturing engineering requirement.

And on the material declaration, we've seen larger companies want to be able to take the material declaration for each of the components and be able to add that all up, to be able to have a complete material declaration on the whole product.

Ken Farrington : And that's the key requirement in the WEEE directive�you have to be able to educate these recyclers what your products actually contain. Because if they contain anything hazardous, then they have to use special handling procedures to recycle that material.

And that's why you see them asking for that larger list�it's because the WEEE directive is broader. It requires them to report.

Marshall Hulbert : I've seen the list from a major OEM where they send a listing materials and they want to know the grams of x in the part. And, for example, they will have a list of maybe 30 or 40 different materials they want to know the weight of and they're talking about a jumper that weighs half a gram and they want to know how many grams of all these materials are in there.

So it's a 2 cent jumper, they buy 100 a year. We get the information for them, but it becomes a nightmare trying to do that for a small order.

Electronic Products : This is because of WEEE, not because of RoHS then?

Ken Farrington : Correct. And granted, at least from a semiconductor perspective, most to those other substances we don't ever use, so it's pretty easy to fill out those lists. It is actually set-up on our Web site.

But that's where the requirement is coming from is, is that recycling information, so that those recyclers can properly grind up the products.

Electronic Products : Any more comments on what an OEM needs to do to be compliant?

Ken Farrington : They need to have a plan. If they do get audited how are they going to get the data�where is it stored.

Electronic Products : So what data do they need to have? They need to have a compliant sheet for every single component, but you're saying they may also need to have a materials breakdown in addition to just a basic compliance.

Steve Schultz : Well, they've got to make the tradeoff. If it's a small EOM just fighting to survive, they're probably fine getting a “yes, no” right now to decide what their Pb-free bomb is going to be.

But they got to have a plan come July 1st�that if for some reason their product gets audited, they've got to know what they have to go in those 30 days that the agency will allow them to produce that paperwork.

Electronic Products : So what if on some small parts, some screws, you can't get a C of C from a supplier? Do you just forge ahead? I guess you're going to go find another supplier then, right?

Omar Ahmad : Yes, exactly that's what OEMs are doing. They're finding replacement suppliers who can supply them with RoHS-compliant parts and with the material list.

The small OEMs are happy to get a C of C and big OEMs want the full chemical disclosure.

Ken Farrington : I've heard it being said with-in companies that have exempt products like the telecom guys, who don't really need to do anything until 2010, that if a competitor developed a RoHS compliant product and got comfortable with the reliability and released it in 2007 or 8, they can get a jump on everybody and create significant market advantage.

Susan Fischer : We've heard that from some of the medical equipment manufacturers, that we are in the healthcare industry we should be the ones providing green products.

Ken Farrington : You know, the key thing that I always have to bring up is that reliability piece. If you have the data to just overwhelm a customer that your new lead-free telecom switch won't have whiskering problems, then they can take that marketing strategy.

Gerald Waldron : I mentioned earlier that in a couple of segments in our higher reliability client base, that's exactly what they're doing. Once case in particular I could cite is in the medical arena and in fact they believe that there is the potential for marketing advantage.

Steve Schultz : We're all environmentally aware, but in the European nations there is a�I'll call it a political imperative with a tremendous amount of public awareness about environmental pollution and concerns, much more so than we see in the Americas today.

And that is a driving force that's very real and there's a marketing advantage by saying you have green products that is the differentiator there and a very real one.

Marshall Hulbert : One concern I have a lot of attorneys getting involved and that they will be exposing companies who aren't compliant.

Ken Farrington : And that's where due diligence piece is the big safety net for these OEMs.

If they can show due diligence then that risk is a lot lower and you don't have to worry about the maverick lawyer that happens to find, you know, one PC that has a little bit of lead in it and thinks he's going to get a $10 million settlement.

Electronic Products : If I'm an OEM, and I have a product, they audit it, and one of the parts�one of the screws�actually had some lead in it and I have a C of C that it says that it doesn't, but it still does. Are they going to stop me from shipping my product in or are they're going to give me a pass because I did due diligence?

Susan Fischer : I don't know that we know the answer to that. Certainly the due diligence would apply to the afterward, any lawsuits or messy stuff after work. I don't think it's clear how quickly you'd be prevented from selling things.

As we said even within the EU nations that due diligence requirement there – it's not uniform.

Steve Schultz : We think that if that product is identified as a problem and you've gone through due diligence you'll be asked to put some kind of corrective action program together to address that and fix that problem, and you would be given time to do that.

However, what that would probably also do is flag you for additional surveillance.

Electronic Products : And you could still ship your product into the E.U.

Steve Schultz : Yes, probably.

Omar Ahmad : But you would receive bad publicity, also.

Steve Schultz : And it is possible they could require a recall of product you have shipped in after 1 July that has this problem. They probably would not do that for a small infraction.

Electronic Products : I guess we could say that OEMs are looking for somebody to tell them a definition of due diligence. What do they need to do to be�I won't say immune�but comfortable?

Ken Farrington : Well, I think what they usually do is they'll go to their legal group and ask for advice there. And that's where it depends on the size of the OEM. Obviously the due diligence a very large international OEM is going to do, is something that can't be afforded by a very small OEM.

And so, you're going to have a sliding scale there. And that's appropriate because there's greater revenue risk and also greater risk of impact on the environment.

Susan Fischer : And that's why we believe that there's a role the distributors can play in helping, especially with the smaller companies, do some of that due diligence for the data collection, the paper trail, and all that kind of stuff.

Ken Farrington : The small OEM probably does not have a head count to allocate to RoHS or WEEE. So they do need some outside help.

And you know, that's great for them. That's exactly what they need. They need to focus on delivering products that'll make their company profitable versus the bigger OEMs that have these large quality organizations, legal teams, etc.