RoHS remains a $30B problem

According to research from AMR Research, the electronics industry in the United States alone will spend $30 billion over the next five years on RoHS compliance. In a research brief by AMR’s Eric Karofsky, AMR claims the industry will spend an average of 3 percent of top line revenue to rectify compliance problems. Karofsky says this is a conservative estimate, as some companies are spending as much as 6 percent of revenue on compliance.

Karofsky sees the problem as twofold. One, most electronics sold in the European Union are affected, except those needed for national infrastructure, the military and some medical devices. Two, even those products exempt from RoHS face a changing supply as component manufacturers change products and discontinue leaded parts.

To illustrate the difficulty of the problem, Karofsky cites some real-world snafus, including Palm’s public statement that it stopped shipping the 650 Smartphone to Europe because of noncompliance with RoHS. Apple recently pulled several products for sale in Europe because of RoHS. The list includes iSight, AirPort Base Station and modem, AirPort Base State power over Ethernet and iPod Shuffle external battery pack, and all of the eMac all-in-one desktop computers. Last quarter, IBM had problems meeting demand for some of its server, as it changed manufacturing processes and supplier to become RoHS compliant.