Canadian OEMs get the lead out

A European Union directive that nearly all electronic products sold within its borders must be lead-free by July 2006 has Canadian manufacturers scrambling to make sure they’ll be ready and won’t loose access to the lucrative European market.

The EU’s goal is to reduce

the hazardous chemicals such as lead (Pb) used in the manufacture of electronics, and also deals with the recycling of components.

Canadian manufacturers will have a chance to get more information and share best practices at an international conference on lead-free soldering, happening May 24-26 in Toronto. Organized by the Centre for Microelectronics Assembly and Packaging and Materials and Manufacturing Ontario, the conference will bring together global experts to help Canadian industry get lead-free.

Flint Pulskamp, program manager for electronics manufacturing services and supply chain management with IDC in San Mateo, Calif., said the EU directive isn’t the first major push to cut down on lead. Japan led the way with a lead-reduction directive in the 1990s, and similar pushes have also come from the United States and Europe in recent years.

Still, Pulskamp said the EU’s lead-free directive has gotten the industry’s attention.

“It has a lot of people scrambling,” Pulskamp said.

While the electronics manufacturing supply chain includes OEMs, contract manufacturers and component manufacturers all working together, Pulskamp said the real onus will be on the OEMs, although they’ll have to rely on the contract and component manufacturers to produce the parts that are lead-free.

“It’s not so much a question of a capital cost to transition, but it’s much more a question of reliability,” said Pulskamp.

The alternatives to lead-based solder, such as tin silver copper or nickel palladium gold, are significantly more expensive and there are questions as to whether it will lead to an increase in replacement cycles.

“The real cost is going to be in the testing cost of these new solder compounds, to find out if they’re really going to work in the applications,” said Pulskamp.

The reliability issue is why the EU has laid out a set of exclusion for mission-critical industries, such as aerospace and defence, server storage, and some telecommunications applications.

Pulskamp said Nortel will be among the firms affected affected in a big way, and he said Nortel is actively making the transition to lead-free, as are the major contract manufacturers, such as Solectron, that it works with.

“Things are fairly similar on compliance in Canada and the U.S.,” said Pulskamp. “The contract manufacturers are very aware and they’re working closely with the OEMs to make sure they can make that transition by July 2006.”

With facilities in Ottawa and China, contract manufacturer OCM Manufacturing got ahead of the curve by beginning the transition to lead-free in late 2004. The process is ongoing, but OCM president Michel Jullian said they would continue to operate lead and lead-free processes concurrently for some time, depending on the needs of their customers.

“The reality is some customers won’t move to lead free because they aren’t effected right away, or they feel they’re not effected,” said Jullian. “Not every customer will be lead-free by 2006.”

Ultimately though, Jullian said all OEMs will have to go lead-free, because non lead-free components will become harder and harder to find.

Since OCM got started early, Jullian said the firm has developed the expertise to get it done internally. OCM is also part of an alliance of contract manufacturers that are sharing best practices.

“If you leave it and are pressured in time, you might need some help,” said Jullian. “It’s the most important project we have on the go right now, in terms of dedicating manufacturing and engineering resources and capital expense.”

Jullian said the transition is ongoing and will be complete before the July 2006 EU deadline. OCM have developed some new processes and purchased new equipment, and also need to transition some of its building materials to lead-free.

“We’ve purchased the equipment and we’re setting it up, then we’ll run some tests and trials here,” said Jullian.

Comment: info@itbusiness.ca

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