Most parts suppliers ready for RoHS
A surprising 82 percent of parts suppliers do not expect the RoHS transition to extend delivery times. Another 70 percent do not foresee the need to charge higher prices for compliant parts. (Ed note: Also see interview with Soanar on page 38 of this supplement). And only 34 percent of component suppliers have more than a 25 percent demand for lead-free parts. These statistics come from a study conducted by US analysts Technology Forecasters for distributor Avnet.
As for the absence of price increases associated with the switch to green parts, Avnet executives believe the market will keep prices steady.
“Market forces will drive any prices increases and at this time, we feel it is too early to project what this will be,” says Jim Smith, senior VP of warehouse and distribution worldwide at Avnet Logistics.
He does believe there may be price increases with leaded products that suppliers continue to produce in small quantities—or quit producing altogether—as they move the overwhelming bulk of their production to green components.
“We anticipate that at some point market pressures for the leaded versions of some products no longer being manufactured or produced in smaller quantities will drive prices higher on those devices.”
While parts suppliers don’t expect delivery times to increase, Smith advises that purchasing managers take cautious action to protect their materials flow. “We strongly suggest that material planners anticipate an impact on lead times and factor that into appropriate buffer inventories on critical components,” says Smith.
Avnet commissioned a similar report this time last year. One of the big differences over the year is that more suppliers expect to issue new part numbers for green components. This is a move that has been strongly advocated by distributors and by their industry group, the National Electronic Distributors Association.
Today, 72 percent of suppliers are offering new part numbers to designate lead-free compliance. Last year that percentage was less than 60 percent. In addition, the number of suppliers providing lead-free product labelling has increased to 60 percent. Last year only 37 percent expected to include lead-free designations on their labels.
The survey reveals considerable confusion about materials declaration. More than 48 percent of parts customers expect to get RoHS certification from their distributors. But because distributors have no control over the manufacturing process, they are unable to offer certification. Instead that will have to come directly from the parts supplier. So far, a very small percentage of parts customers have made progress in obtaining useful materials declaration data from their suppliers.
Survey results indicate that only 68 percent of product manufacturers expect their goods to be fully compliant by the 1 July 2006 RoHS deadline. Yet that percentage includes most manufacturers that are not exempt and distribute their products globally. The manufacturers that don’t expect to be compliant by the deadline mostly produce products that are exempt or do not market their goods internationally.
5-Oct-2005