What’s RoHS’ cost?
By Purchasing Staff -- Purchasing, 9/29/2005 6:00:00 AM
Many electronics companies are trying to figure out what will be the cost of complying with the European Union’s Restriction on the Use of Hazardous Substances law which bans the use of lead and other hazardous substances in equipment.
There is a lot of speculation of the cost of RoHS and estimates vary widely. "We are hearing statistics from some mistaken consultants that name-brand electronics companies need to spend 10% of their research and development (R&D) budgets to comply with RoHS," says Pamela Gordon, president of Technology Forecasters. She says some say that RoHS compliance will cost $100 million.
Based on hundreds of interviews with electronics companies, their contract manufacturers, and suppliers, TFI estimates that meeting RoHS requirements requires a one-time investment of 2-3% of cost of goods sold.
She says that companies can minimize the cost of RoHS through a design for environment initiative. Such an initiative means fewer components and materials are used in a product and the product is designed so it van be easily dismantling and recycled. The product is also energy efficient and recycled materials are used in production of the product when possible.
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