Regulation Overload Impacts the Connector Industry
By Bob Hult, Bishop & Associates

Way back in February of 2003, when the European Union adopted a directive, commonly referred to as RoHS, restricting the use of certain hazardous substances in electrical and electronic equipment, the primary concern was meeting the challenge of replacing lead in electronic components and assemblies.  

Tin/lead solders and plating had been used for many years throughout the industry, which traditionally hates changes to a proven technology. There was much gnashing of teeth over concerns about the reliability of alternative materials, their impact on manufacturing processes, as well as increased cost. By the time RoHS was actually implemented in July of 2006, the majority of these technical issues had been resolved.

Although it requires higher reflow temperatures, pure tin solder was found to be a viable alternative. Some soft shell connector housings required retooling as higher temperature plastics were introduced. The connector industry has largely settled on matte tin plating, which has proven to be reliable and cost-effective. The feared massive quantities of short circuits resulting from the formation of conductive tin whiskers in lead-free plating have not materialized to the extent predicted, although the physics behind their formation is still not fully understood. Apprehension about the cost of maintaining dual inventories, proper labeling, part number systems, and supporting exempted product types have decreased as OEMs have built confidence in lead-free alternatives. The majority of equipment manufacturers chose to adopt lead-free alternatives to simplify their parts inventory. The RoHS ban on lead has influenced the purchasing, sourcing, design, and manufacturing of connectors, making RoHS-certified parts the default standard. Tin/lead connectors are still available, but some suppliers are discouraging their use by charging a premium price.

Initially, OEMs often required suppliers to provide compliance documentation on their own unique format, creating a major headache for connector manufacturers. To support demand for documenting compliance, some connector manufacturers have expanded their environmental health and safety departments. The introduction of IPC 1752, forms that provide a standardized reporting format for material declaration data exchanges among supply chain participants, has reduced the volume of customer specific reports. This format is far from universally accepted today, but it is helping to minimize the redundant volume of paperwork.

Even the military has begun investigating the risk to reliability posed by lead-free electronic components. The absolute mandate for long-term reliability has made military subcontractors reluctant to adopt lead-free assembly because of concerns about tin whiskers and damage to other components due to higher processing temperatures. Military and aerospace products maintain their RoHS exemptions, but subcontractors are finding it more difficult to find leaded products, as the commercial industry has largely adopted lead-free. In some cases, pure tin solder tails have been dipped in leaded solder to satisfy an OEM. The industry has been working for several years on a Lead-Free Control Plan, which would assess the risks of introducing lead-free solder to military manufacturing processes.

RoHS began what has become a blizzard of paperwork, as updates to existing directives are constantly updated and new initiatives are spawned. It may well be that the expenditure of resources related to collecting and providing documentation mandated by these edicts may end up adding more cost than any actual tooling or product modifications.

A good example is the Registration, Evaluation, Authorization, and Restriction of Chemical substances, or REACH program, which went into effect in June of 2007. The objective of this EU regulation is to minimize human health hazards due to exposure to an increasing range of chemicals. Manufacturers are required to document that their products do not use or contain any Substances of Very High Concern (SVHCs). Unlike RoHS, which applies exclusively to the electronics industry, REACH impacts every user of chemicals. Connector manufacturers must survey all of their internal manufacturing sites as well as their many suppliers to ensure compliance. Several of the targeted materials are currently used by the electronic component industry, and a search for alternates will be required. The issues of discovery and penalties for non-compliance are confusing at best.

REACH is an ongoing program that is constantly evaluating materials and issues a new blacklist of additional chemicals every six months. The long-term objective is to evaluate 30,000+ substances. This practice forces manufacturers to constantly go back through their supply chain to verify and document usage, multiplying the paperwork. Connector manufacturers must monitor the program and anticipate what materials may be banned in the future to provide adequate time to find alternatives. One hopeful sign is the recent EU effort to coordinate RoHS requirements with those of REACH. 

With the migration of manufacturing to plants located overseas, and procurement from subcontractors and material suppliers located throughout the world, the task of verifying compliance increases exponentially. The recent earthquake and tsunami in Japan have illustrated how interdependent global supply chains have become and how difficult it is to track the source of each component.

Larger connector manufacturers have responded to these mandates by expanding departments specifically dedicated to addressing environmental issues and supporting their customer documentation requirements. In some cases, a department may be created within each business group, while others focus efforts via a corporate level office. Large multi-national manufacturers have created corporate-wide policies to address environmental directives, which are monitored by personnel located at each manufacturing facility. Smaller companies with limited resources have stimulated the creation of a new industry that provides regulation consulting and management services. Third party sources of material declarations offer an alternative to dedicated personnel responsible for responding to document requests from individual customers. Companies such as Environ offer their BOMcheck program, which allows manufacturers to post their material certifications to a secure central database, which can be made available for authorized inquiries. Another example is the International Material Data System (IMDS), which is a dedicated data collection system specifically created to support documentation requirements of the automotive industry supply chain.

The churning of existing regulations and introduction of new mandates that impact the connector industry is dramatically increasing workloads. The Chinese version of RoHS, the first draft of which was implemented in March of 2007, is still a work in progress. To date, labeling of equipment destined for sale in China is the only requirement, but questions remain regarding specific product categories to be regulated and acceptable compliance procedures. How the government will be able to differentiate between devices intended for consumption within China and those that will be exported is unresolved.

Thankfully, environmental legislation currently being promoted by individual U.S. states has largely mirrored existing regulations, but still requires continuous monitoring.

Global efforts toward minimizing human impact on the environment, energy conservation, and fair trade have become an evolving source of new requirements and restrictions that are generating more paperwork for the electronic component industry. Connector companies are seeing increased Corporate Social Responsibility (CSR) requests from their customers.

Organizations such as Greenpeace are pressuring OEMs to minimize their negative impact on the planet through the use of improved materials and processes, as well as labor and ethics management practices. A lack of hard science to support some of the Greenpeace claims has clouded the issue, but they have been effective in bringing attention to the human impact on the environment and encouraging the purchase of environmentally friendly products. In some cases, products are marketed as “green” to provide a competitive advantage, as well as avoid negative publicity.

The release of carcinogenic gasses when materials containing halogen are burned has become a Greenpeace issue. As photos of third world children burning insulated wire to recover the copper are published, product recyclability and end-of-use disposal issues have come under increased scrutiny. Halogenated plastics are commonly used to provide flame-retardant characteristics to connector housings. Several connector and cable manufacturers have begun transitioning to halogen-free plastics to address this concern, but the process has been slowed due to limited availability of alternate materials. This supply bottleneck is expected to be relieved by late 2012 as new production capacity comes online. The most recent draft of RoHS II dropped halogenated plastics from the banned list, due to a lack of widely available alternatives, but will likely be considered again for inclusion in future iterations.

Economic pressure in the form of creating buyer preferences is encouraging global OEMs to promote their environmental compatibility achievements, while a variety of new environmental initiatives are making participation a top priority — and the paperwork mountain to grow. Departments within connector companies that are chartered to respond to environmental directives have developed information gathering systems and skills that are well suited to addressing these demands. As additional legal and social initiatives grow, these departments are being utilized to address the data collection and documentation requirements created by emerging mandates. 

The Security and Exchange Commission (SEC) has proposed a Conflict Minerals regulation that requires that all SEC listed companies verify that their procurement of select minerals are not mined in conditions of armed conflict and human rights abuses. Targeted regions include the Democratic Republic of the Congo and adjoining countries. Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in July of 2010 and includes reporting requirements, including a due diligence plan for any company whose products contains these metals.



Critical metals defined in the edict and used extensively in the connector industry include gold and tin. The proposal will require the development of compliance roadmaps, collection of data from suppliers, and generation of compliance documents.

The Carbon Disclosure Project is an initiative based in the United Kingdom that attempts to reduce greenhouse gas emissions generated by major corporations. This organization is in the process of building an extensive collection of data on emissions water and energy usage, and is soliciting support from global industry leaders to develop reduction strategies. Rather than deal with conflicting political interests within individual countries, they are working with more than 3,000 corporations to encourage the reduction of carbon emission and energy usage as part of their business plans. 

Working through five individual programs, the CDP is gaining attention and support due to participation by highly visible multinational corporations. Manufacturers of all types, including connectors, will be asked to provide data on carbon emissions, energy and water usage, not only internally, but also from each member of their entire supply chain. Although the CDP program is currently in the formative stage, connector manufacturers have already begun receiving requests for supporting data from their customers. Depending on the degree of information granularity required, this initiative has the potential to become a major research and reporting challenge.

Ethical conduct of corporations is another area that is being scrutinized. The Electronic Industry Citizenship Coalition (EICC) has created a common code of conduct for the electronics, information, and communications industries, and addresses working conditions and social responsibility. The EICC provides tools to audit compliance with the code and helps companies report progress. Major companies, including AMD, Cisco, Dell, Celestica, Flextronics ACER, and Apple, are members of this organization and have begun requesting compliance documentation from their supply chains.

At least one major computer manufacturer has initiated a new program that seeks to ensure that their supply chain includes a diversity of employees. Documentation of compliance will require a survey of all subcontractors and suppliers.

The recent earthquake and tsunami in Japan and volcano in Iceland has encouraged several large OEMs to consider the impact of major disasters, both natural and manmade, on their global supply chain. They have begun asking their suppliers to provide detailed business continuity plans that would ensure uninterrupted supply in the event of disasters resulting from nature, war, and terrorist activities.

The current debate about the source of rare earth materials may eventually evolve into another conflict materials type regulation. Although it would not directly affect the manufacture of connectors, suppliers are increasing their involvement in value-added assemblies that may require the use of these materials.

Each of these initiatives demands research into a supply chain that has grown dramatically in size and global in scope. One connector supplier suggested that they are experiencing a 15% to 30% yearly increase in the number of requested customer surveys. The cost of responding to this expanding list of data requests varies with the size and resources of individual manufacturers, but will ultimately have an impact on the price of connectors. The resources consumed in responding to these initiatives is now considered one more cost of doing business.

Bishop & Associates Inc. Comments:

• A combination of environmental and social initiatives is impacting the electronic component supply chain with ongoing documentation and certification demands. Gathering detailed information from a complex and globally dispersed base of vendors has become a major challenge.

• RoHS has been accepted by the electronics industry, with some product alterations completed and some standard documentation formats established. Connectors compliant with RoHS have become the norm.

• OEMs cannot afford to ignore a regional material or social initiative unless they are willing to withdraw from that market, an unattractive option in a global economy.

• REACH is more problematic, as new chemicals are being added, requiring extensive surveys of all suppliers and subcontractors.

• Harmonization of environmental standards would go a long way toward simplifying the conformance process and minimize the associated expense.

• Many environmental and social mandates are constantly evolving, increasing the complexity and cost to verify compliance.

• The European Union WEEE program is intended to reduce the amount of electronic waste entering and potentially contaminating our landfills. Although it does not directly impact manufacturers of electronic connectors, demand for recyclable electronic products will eventually force component suppliers to consider new materials and designs that facilitate separation and reclaiming of materials at end of product life.

• The introduction of standardized industry data reporting formats has streamlined the work of supplier environmental compliance departments. One manufacturer stated that less than 20% of their surveys now require customer specific formats, down from 50% a year ago.

• The need to economically survey their entire supply chain is encouraging connector manufacturers to scale down their supplier base to a smaller trusted group that can support detailed reporting requirements. This may result in the elimination of many smaller suppliers. The same process may also occur at the OEM level.

• The ability to provide supply chain transparency has become a criterion that OEMs are using in the connector vendor selection process. Compliance is a basic expectation, with increased on-site audits for verification.

• New initiatives related to ethical, social, and legal objectives will continue to provide long-term job security for environmental compliance teams.

Robert Hult Director of Product Technology, Bishop & Associates Inc. Robert Hult has been in the connector industry for more than 39 years. Hult began his career as a sales engineer for Amphenol in Chicago. He joined AMP Inc. in 1972 and served in several management positions through 1996. In 1997, Hult joined Foxconn as group marketing manager for Intel in Chandler, Arizona, U.S. Prior to joining Bishop & Associates, Hult was the regional application engineering manager for Tyco Electronics. Hult graduated in 1968 from Bradley University with a bachelor of science degree in electronics technology and a minor in business. He can be reached at rhult@bishopinc.com.