The Electronics Source Book
July 27, 2005
Finding leaded parts after the RoHS deadline
Will RoHS bring back the $700 hammer? The European Union’s Regulations on Hazardous Substances (RoHS) is forcing component manufacturers to switch to lead-free parts. The defense industry, however, is exempt so they can continue buying parts that contain lead/tin solder and lead/tin finishes, which are considered to be more resistant to the growth of tin whiskers than pure tin or tin alloy solder and finishes. The tin whiskers are those pesky hairs that can grow and break off, potentially short circuiting a component.
But just because the military is allowed to use leaded components, doesn’t mean they will be able to find those parts after the July 1, 2006 RoHS deadline. After that date, all commercial parts will be lead free. Certainly many component manufacturers will continue to produce their mil-spec, high-rel components – those made specifically for the defense and aerospace industry. But the military has become accustomed to buying commercial parts over the past 15 years.
That’s where the $700 hammer comes in. In the mid-1980s with a ballooning federal deficit, the defense industry came under fire for excesses in mil-spec purchasing. The military spent over $700 for a specially made hammer that could easily be replaced by a store-bought $12 version. You may also recall a toilet seat that cost hundreds of dollars.
The defense industry responded by drastically changing their procurement procedures to accept commercial products. Purchasing commercial products has become particularly widespread in electronics since commercial electronic components are both cheap and reliable. Huge portions of the defense industry shifted the bulk of their purchasing to commercial parts. Now the military wants to keep buying commercial, and they also want to keep buying leaded parts. But can they have their cake and eat it too?
Some weeks back, this newsletter discussed the potential problem of an oversupply of leaded parts after the RoHS deadline passes. Now it’s time to consider the other side of the problem: will the defense industry be able to find enough leaded parts after July 1, 2006? When we asked component suppliers whether they plan to continue providing leaded parts after they begin to sell green parts, we received positive responses. Yet many who watch the electronics industry supply chain doubt it will continue for long. “If suppliers do continue to produce leaded products, the price point will not be a low,” says Peter Lachapelle, VP of content and supplier relationship management at i2 Technologies Inc., a Dallas-based supply chain software company. “The suppliers won’t have the same economies of scale to keep prices low.”
Lachapelle also notes that many in the defense industry have started to stockpile leaded parts in anticipation of shortages after suppliers go green. He estimates that as much as $1 billion in parts have been hoarded so far. Lachapelle expects there will be disruptions in the supply chain because of excess inventory of some leaded parts and shortages of other leaded parts. “One of the biggest impacts to the sourcing and procurement organization will be the transition period from lead-based parts to lead free,” says Lachapelle. “The transition has the potential to cause turmoil and disruption which can lead to lead-based parts getting put on allocation.”
He also notes that many who need leaded parts may have to seek them from non-traditional sources such as the gray market. When that’s exhausted, he believes commercial leaded parts will “increase in price or become obsolete and unavailable.”
In talking with defense procurement specialists, we have yet to find any panic. Those we spoke with expect their supply of commercial lead-based components to continue without interruption. Suppliers we have quizzed on the subject – including IDT and Actel who we interviewed for this newsletter – insist they will continue to provide leaded versions of their parts. When asked whether those leaded versions will increase in price after their components go green, they say their prices will stay the same, even though they will produce leaded parts in much smaller quantities. But if Lachapelle is correct about $1 billion being spent to hoard leaded parts, some manufacturers apparently have doubts about the availability of leaded parts much beyond July 1, 2006.
1. Industry braces for the lead-free conversion
2. Progress on lead-free components spotty
3. IDT: 99 percent lead free already
4. Actel goes green on 100% of its FPGA products
5. Lead-free parts: Welcome to the messy supply chain
6. Are the military and telecommunications industries off the hook on RoHS?
7. Will
electronic equipment fail from tin-whisker shorts?
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