Hazardous substances law threatens IT supplies

RoHS rules may cause both gluts and shortages of IT equipment

The EU’s Restriction of Hazardous Substances (RoHS) directive took effect this week and could have a short-term impact on pricing and availability of electronics and electrical goods, experts said

RoHS is intended to limit the use of substances such as lead and cadmium and is one of several rules that are forcing manufacturers to take more environmental responsibility. Similar codes in China and South Korea are also imminent.

Mike Bellnier, vice-president of engineering services at storage systems maker Adaptec, said there was potential for “huge disruption” in the supply chain. “When we changed all the components on our products to comply with RoHS we had to change our manufacturing processes, our handling procedures, and our inventories,” he said.

“[Some suppliers] have been very slow off the mark. If these suppliers come too late to the market with RoHS-compliant products then their reseller customers are going to find themselves out of stock and waiting on kit that could be weeks or months away from the shelves.”

Unlike some others, Adaptec will label its goods to demonstrate RoHS compliance but the company believes that nobody will effectively police compliance.

Also, a grey area in the RoHS rules means that non-RoHS goods can still be sold if they cleared customs before 1 July and were not stockpiled. That is likely to mean heavily discounted electronics and electrical goods for the next few months, said experts.

Conrad Mohr, managing director of surplus distributor IT Industries, predicted a “very soft” market for the next three months. Mohr said he had been offered thousands of laptops, digital audio players and other goods.

In the short term, RoHS could also cause the scrapping of equipment correctly or mistakenly believed to be non-compliant, and potentially lead to price fluctuations as the supply chain absorbs the cost of meeting compliance requirements.