Lead Added to EU REACH Candidate List of SVHCs

By Nicolas Robin, IPC Senior Director, Europe

The European Chemicals Agency (ECHA) added lead metal on its Candidate List of Substances of Very High Concern (SVHCs), on 27 June 2018, owing to its properties as a reprotoxic substance.

What does Candidate Listing mean for IPC Members?

Companies may have legal obligations resulting from the inclusion of lead metal in the Candidate List. Candidate Listing means that EU suppliers of articles containing more than 0.1% by weight of lead – including lead-based batteries, architectural lead sheet, engineered lead products and those manufactured with lead containing alloys – must provide information to the recipients which allows for safe use.

Note that in the case of complex objects (i.e. objects made up of more than one article joined or assembled together), the 0.1% threshold applies to each article. As a minimum, the information provided by the article supplier must contain the name of the substance, if present above the
0.1% threshold. The information must be provided in writing and free of charge.

There is also a requirement to notify ECHA. This notification must be submitted by the importer/producer no later than 6 months after the substance was included in the Candidate List. EU and EEA suppliers of substances on the Candidate List must provide their customers with a
safety data sheet (SDS), including relevant exposure scenarios where relevant. Lead producers should already be doing so, but an update is recommended to notify their customers of the inclusion of lead metal in the Candidate list as a Substance of Very High Concern.

The obligation to provide a SDS also applies to mixtures including solders and (pre-fabricated) alloys; however, if the mixture does not meet the criteria for classification as hazardous under CLP, the SDS needs only to be provided at the recipient’s request.

What are the next steps?

The next regulatory step after Candidate Listing is the inclusion of the substances on the so-called Authorization List. Once included on the Authorization List, companies wishing to use the substance will have to apply for application-specific permissions from ECHA.
a) 2019: With lead metal included on the Candidate List in June 2018, it could be included in ECHA’s prioritization exercise in 2019, with a formal recommendation likely to be submitted by ECHA to the European Commission the same year.
b) 2021: If the REACH Committee of Member State representatives agrees to include lead metal in Annex XIV, the Authorization List, the substance could be added as early as 2021; a transitional period would apply, potentially giving rise to a ‘sunset date’ (after which REACH Authorization would be required to use lead metal, unless exemption applied) in 2024.
c) Before 2024: Companies applying for authorization to use lead metal in the EU would need to submit their application at least 18 months before the sunset date to prevent supply chain disruption. Authorization would only be granted if the risks to human health or the environment from the use of metallic lead on its own or in a mixture above the relevant concentration threshold is proven to be adequately controlled or, in the case where adequate control cannot be demonstrated that the financial benefits of continued use outweigh the societal costs of the health and/or environmental impacts and that there are no suitable alternative substances or technologies for the use.

What can IPC and its members do?

IPC will be engaged in an advocacy campaign in partnership with an Eurometaux/ILA cross commodity platform. The goal of this campaign will be to stop the inclusion of lead in the authorization list, or if not possible to advocate for exemptions.

Engage with lead cross commodity platform (September 2018-2019)
1. Map out the use of lead across the industry and assess where the risks areas and potential adverse effects are and in which applications substitutions to lead are possible.
2. If lead metal were to be prioritized for Authorization, a 90-days public consultation will be opened to gather views on transition periods, case studies and examples highlighting where REACH Authorization would lead to regulatory overlap or inconsistency. Data will need to
be collected from IPC membership to develop a socio-economic analysis.

Focus efforts on R&D funding for substitution: Both ECHA and the European Commission are very keen on fostering R&D efforts on substitution, for which the EU offers a specific budget line. IPC will assess the possibility to get funding opportunities for research on leadfree
electronics and has already initiated preliminary contacts with the European Commission service in charge of R&D.

If you have any questions or comments please contact me at NicolasRobin@IPC.org.

U.S. Trade Policy and Your Business: A Webinar for IPC Members

U.S. Trade Policy and Your Business | June 29, 2018 | 11:00 am EDT

As you’ve seen in the news, the Trump Administration has established an aggressive trade agenda, with significant developments occurring almost daily. Many of these developments will impact the electronics industry. For example, an additional 25 percent tariff on more than 800 Chinese products is scheduled to go into effect on July 6. Those tariffs disproportionately target the electronics supply chain. Likewise, new duties and countervailing duties on aluminum will also increase costs for U.S. manufacturers, including the U.S. printed circuit board industry. The IPC Government Relations team is monitoring these developments and weighing in with policy makers.

IPC members, please join us for a U.S. trade policy webinar on Friday, June 29 at 11:00 am EDT featuring trade law practitioners Nova Daly and Tim Brightbill of Wiley Rein LLP. They will discuss both the recent or proposed imposition of new tariffs as well as proposed investment restrictions to be announced later this month.

This free informational webinar is designed to help you make sense of the dizzying pace of trade developments and the impact these developments may have on your business.

IPC members, register now

Automotive Electronics: Past/Present/Future

IPC president and CEO John Mitchell discusses technological advancements in automotive electronics and IPC’s standards development activities that support the automotive industry.

IPC E-Textiles 2018 – Where Standards, Innovation and Collaboration Will Combine to Create the Perfect Speedstorm

IPC D-70 E-Textiles Committee chair Stephanie Rodgers and vice-chair Ben Cooper spotlight just some of the reasons why you need to be at IPC E-Textiles 2018. Stephanie and Ben are members of the IPC E-Textiles 2018 program committee, which has put together a stellar lineup of technologists from the e-textiles space who will provide real-world solutions for merging textiles with electronics.

Stephanie and Ben will also kick of the workshop with two interactive sessions:
• Textiles and Testing 101
• E-Textile Creations Speedstorming – Who Thinks Up This Stuff?

As you can see in their video introduction, IPC E-Textiles 2018 will be a creative, collaborative forum for technologists and innovators to identify solutions, create partnerships and help propel growth for the e-textiles market. And expect a little fun along the way.

Register for IPC E-Textiles 2018
View the full agenda and register today.

Visit the IoClothes Forum
Ben Cooper has created the IoClothes Forum for industry to connect and stay on top of all that’s happening in the world of e-textiles. Visit the forum today to participate in peer group discussions and also to listen to and subscribe to Ben’s podcast, where he interviews thought leaders and innovators.

IMPACT Washington, D.C. 2018: Electronics Industry Leaders Urge Policymakers to Support Pro-Electronics Agenda

As an industry-driven association, IPC exists to help its member companies innovate, compete, and succeed in the electronics industry. Effective government relations is crucial to our collective success, because many of the policy debates taking place in world capitals have wide-reaching impacts on our industry.

That’s why senior executives from top electronics companies recently gathered for “IMPACT Washington, D.C. 2018” to advocate for a pro-growth, pro-electronics policy agenda.

During the two-and-a-half-day event, member executives met with leaders of the Trump Administration and members of Congress to share their views on issues including strengthening the defense industrial base; ensuring a skilled workforce; and advancing free and fair trade.

Participants met with leaders of the Trump Administration, including:
Andrew Wheeler, Deputy Administrator, Environmental Protection Agency;
Alexander Gray, Deputy Director, White House Office of Trade and Manufacturing;
Ian Steff, Deputy Assistant Secretary for Manufacturing, International Trade Administration;
Eric Chewning, Deputy Assistant Secretary, Office of Military Industrial Base Policy;
Chesley Dycus, Advisor for Defense, Office of the Vice President;
Rosemary Lahasky, Deputy Assistant Secretary, Employment and Training Administration, U.S. Department of Labor; and
Dr. Michael Wooten, Acting Asst. Secretary of Education, Career, Technical and Adult Education (CTE).

On Capitol Hill, the group had 25 individual and group meetings with key policymakers, including:
• Senator Mark Warner (D-VA);
• Senator Lindsay Graham (R-SC); and
• Senior staff of four major congressional committees.

IPC also arranged for participants to meet one-on-one with their hometown congressional representatives to discuss the local implications of federal policy issues.

Attendees had the benefit of background briefings on the political and economic trends that are driving events in DC, from former Congressman Tom Davis of Virginia; former chairman of the White House Council of Economic Advisers Douglas Holtz-Eakin; and top labor lawyer Maury Baskin.

IPC also recognized two Senators with the IPC Government IMPACT Award. Senators Joe Donnelly (D-IN) and Todd Young (R-IN) were honored for their leadership roles in supporting a robust domestic electronics industrial base. The two senators serve on key congressional committees and represent the Defense Department’s Executive Agent for Printed Circuit and Interconnect Technology at the Naval Surface Warfare Center in Crane, Indiana – an office that is vitally important to our industry.

To see photos of this year’s event, click here.

To all who participated, thank you! Your active engagement has already been crucial in advancing our industry’s policy agenda. For example, The Senate FY2019 National Defense Authorization Act (NDAA) includes language that will assess the U.S. defense electronics industrial base and help establish long-term funding and policy direction for the Executive Agent at NSWC Crane.

If you missed this opportunity and want to be in the loop on IPC’s government relations efforts going forward, please let us know. We have a robust agenda of follow-up activities, and your participation in those efforts would be welcomed and valuable.

Stay tuned for more news from IPC government relations, and we’ll be looking forward to seeing you next year at IMPACT Washington, D.C. 2019!

President Trump Announces 25 Percent Tariff Imposition on Chinese Imports

Today, President Trump announced that he will impose 25 percent tariffs on Chinese imports worth roughly $50 billion. The tariffs, first proposed in April, are the result of a Section 301 investigation that found China’s technology transfer policies had harmed U.S. companies.

The first round of these tariffs will take effect July 6 and will target more than 800 products at the heart of the Made in China 2015 initiative, including “industrially significant technologies.” These 800+ products are valued at $34 billion in trade value and come from industries like aerospace, robotics, and automobiles, but excludes most consumer purchased goods like televisions and cellphones. We encourage you to review this list as it includes many tariff codes that the electronics industry uses to import goods.

In May, IPC sent a letter to the U.S. Trade Representative warning that the Section 301 action could harm U.S. manufacturers because the proposed tariffs primarily target the supply chains of U.S. companies that are least able to weather cost increases. Please continue to keep us informed about how these tariffs are affecting your businesses so we can align our advocacy goals accordingly.

The Trump Administration plans to impose a second round of tariffs valued at $16 billion in trade that were not on the original list proposed in April. This second list will have to undergo public comment and review before being finalized. We will be studying the new list and its likely impact on the electronics industry.

China has indicated that it plans to impose retaliatory tariffs in response to increased U.S. duties, and top U.S. trade officials have said the U.S. will respond in kind — raising concerns that a trade war may erupt unless the two countries can negotiate an agreement.

U.S. and Chinese trade officials continue to negotiate. The Trump Administration has suggested the new tariffs are designed to ratchet up pressure on China to make concessions. To that end, the President has the flexibility to delay the duty increases up to 180 days depending upon progress in the negotiations.

Earlier this year, the U.S. imposed steel and aluminum tariffs on most countries around the world including China. China has already responded with retaliatory tariffs as have other countries. Those tariffs are already being felt by U.S. manufacturers — including those within the electronics industry — that cannot source domestically the steel and aluminum they need. The Trump Administration is also planning to impose new investment restrictions and export controls against China that would curb Chinese acquisition of “industrially significant” technology. An announcement on these new controls is expected by June 30.

Contact Chris Mitchell, IPC vice president of global government relations at ChrisMitchell@ipc.org for more information about today’s announcement.

IPC Automotive Electronics Reliability Forum Highlights Future of Automotive Electronics Design and Manufacturing

Fueled by strong growth in electric vehicles and autonomous cars, and a dramatic increase in electronics content in conventional automobiles and trucks, automotive electronics are crucial components of engine, ignition, and transmission management; entertainment, navigation, diagnostic tools and safety systems. IPC has gathered thought leaders and subject matter experts from leading electronics and automotive companies to discuss the future of automotive electronics design and manufacturing at “IPC Automotive Electronics Reliability Forum,” June 4-5 in Nuremberg, Germany.

Andreas Aal, semiconductor strategy and reliability expert at Volkswagen, will open up the forum on June 4 with his keynote, “Challenges of Using Advanced Package Technologies in Automotive Applications.” On June 5, Dr. Maxime Makarov, head of electro-physics at Groupe Renault, will discuss electronics reliability during his keynote, “On-Board Electronics Reliability: Assessing the Need to Revise Conventional Approaches.”

During the two-day event, Aal and Makarov will be joined by other automotive and electronics industry technologists from, Continental Automotive, Robert Bosch GmbH, Infineon, Henkel, TTM Technologies, Atotech, MacDermid Enthone, IHS Markit and more, who will provide updates and technical content on such topics as: the automotive electronics market, surface finish and assembly material interactions affecting electronic system reliability and performance, future reliability challenges for new packages, challenges of semiconductor product qualification for extended automotive requirements, and design considerations of high reliability PCBs for high power automotive applications.

“IPC’s Automotive Electronics Reliability Forum will allow attendees to build personal relationships with the innovators who are working on tomorrow’s electronics technologies as well as gain first-hand knowledge of the pioneering projects that are putting automotive electronics breakthroughs into practice,” said Philippe Léonard, IPC Europe director. “The forum is not solely about the automotive industry,” adds Léonard — “it’s about technologies, electronics market, thermal energy in PCBs, onboard electronics reliability, and much more. As the forum covers a wide breadth of relevant and timely topics, it is perfectly suited for engineers and technologists representing Transportation OEMs, Tier 1 systems providers, and assembly, printed circuit board and materials partners.”

Speaker Laurent Coudurier, combustion team manager at Air Liquide concurs, “As reliability is a major driving force for automotive electronics, it is very beneficial to share developments coming from different industrial sectors involved in the supply chain and contributing to improve reliability of electronic assemblies for cars.”

For more information or to register for “IPC Automotive Electronics Reliability Forum,” visit www.ipc.org/Automotive-Reliability-Forum.

IPC Provides Comments to USTR on Domestic Impact of Proposed Tariff Rate Increases on Chinese Imports

Today, May 11, IPC provided comments to the Office of the U.S. Trade Representative (USTR) on the domestic impact of proposed tariff rate increases on Chinese imports 

May 11, 2018

The Honorable Robert Lighthizer
U.S. Trade Representative Office of the United States Trade Representative 600 17th Street, NW Washington, DC 20508

RE: Proposed Determination of Action Pursuant to Section 301 (USTR-2018-0005)

Dear Ambassador Lighthizer:

IPC — Association Connecting Electronics Industries® appreciates the opportunity to provide comments on the domestic impact of proposed tariff rate increases on Chinese imports as proposed by the Office of the U.S. Trade Representative (USTR) in its Section 301 Determination of Action.

IPC is a U.S.-headquartered, global trade association representing all facets of the $2 trillion electronics industry. We are the definitive authority for industry standards, training, market research, and public policy advocacy. IPC has more than 4,300 members globally—2,300 of which are located in the United States. Our industry employs more than 2 million Americans, many of whom have coupled high school and post-secondary education with technical training to secure stable, well-salaried employment in advanced manufacturing.

On behalf of these 2 million Americans, I write to register the electronics industry’s concerns about the imposition of increased duties on Chinese imports. IPC understands that the proposed tariff increases are intended to punish China for their technology transfer policies, and we share that concern and support alternative measures to address it. However, the proposed action will inflict significant and long-term harm on many small- and medium-sized U.S. electronics manufacturers that rely on Chinese materials, components and equipment to produce their products and compete in the global marketplace.

Many of the proposed tariff increases will be felt deep within the electronics supply chain among industry segments known for their thin margins. The companies that survive in these segments—especially in the United States—do so by keeping costs down and responding nimbly to customer requirements. The proposed action will increase production costs, delay product deliveries, and disrupt supply chains, imperiling U.S. manufacturers and the jobs they provide.

Instead, IPC encourages the USTR to pursue bilateral negotiation and multilateral trade remedies to address U.S. concerns with China’s technology transfer policies. Should the USTR decide to impose higher duties on Chinese imports, we implore you to exempt imports— including raw materials, components, and equipment—that cannot be easily sourced outside China but that are critical to U.S. manufacturing.

The Interconnected, Global Electronics Supply Chain
The U.S. manufacturing industry has changed dramatically over the last 40 years. In 1980, the U.S. boasted close to 20 million manufacturing jobs. Today, that number is closer to 12 million even as the nation’s total workforce has grown. The U.S. electronics industry has been especially hard hit. Thin margins led companies to seek low-cost production facilities outside the U.S., primarily in China. As electronics manufacturing grew in China, so did the supply chain ecosystem to sustain it. Conversely, in the U.S., the supply chain eroded, leaving major gaps in the industrial base.

These gaps are ever-present for U.S. electronics manufacturers. Their survival depends upon meeting customer requirements by outperforming their foreign competitors and by accessing an interconnected, global electronics supply chain. The domestic supply chain cannot fully satisfy the many and diverse needs of U.S. manufacturers, most of whom are now geared towards specialized, low-volume production. A large enough market does not exist to support a robust domestic supply chain. IPC is optimistic that advanced manufacturing and a rising desire for smart sourcing will continue to grow U.S. manufacturing, but that long-term growth will be undermined by the short-term harm done by the proposed tariffs.

Increased Tariffs Will Harm U.S. Electronics Manufacturers
In response to the USTR’s proposed Determination of Action, IPC conducted a survey of its U.S. membership, and the results suggest that many U.S. firms will be negatively impacted by increased tariffs on Chinese imports. Of the respondents, 87% import raw materials, components and/or equipment from China. These importers are diverse in size and market segment, representing a cross-section of IPC’s membership. The respondents collectively have production facilities in 36 U.S. states, with the highest concentration of facilities in California followed by Minnesota, Texas, Illinois, and Wisconsin.

The respondents were asked to rate the effect of these tariffs on their businesses on a scale of 0 (no impact) to 100 (threat to survival). More than one-third of respondents (35 percent) said the impact would be severe and could endanger their companies, further shrinking the U.S. electronics industry. About one-quarter (23 percent) predicted a moderate impact, and 42 percent indicated the negative impacts would be minimal. Of those companies that rated the impact low, many expressed confidence that they could restructure their supply chain and pass costs along to their customers. A few believed the tariffs would help their businesses.

Those companies rating the impact higher were not so optimistic. Consider the case of one respondent: a small- and medium-sized manufacturer of printed circuit board assemblies and critical electronic systems for customers in the industrial, aerospace, defense, automotive and medical industries. The company has three manufacturing facilities located in Texas, Wisconsin and Mexico. This firm exemplifies the “reshoring” movement in the U.S. In this low-margin business, the company operates leanly and with a laser focus on its competitive advantage: low volume, high complexity manufacturing to allow customers to source electronics in the region where they are sold. This company has been a success story by revolutionizing, not only how we manufacture, but how we think about the total landed cost of ownership through the entire manufacturing production lifecycle and supply chain.

On the 0-to-100 scale mentioned above, this company estimates the negative impact of the proposed tariff increases at 70. In 2017, the company spent more than $2 million on manufacturing equipment, including equipment listed in the proposed Determination of Action. The most costly items were an automatic electronic component placement machine (84798992) and industrial furnace (85143010). Increasing tariffs on these products only increases the company’s cost of production before it has even procured base materials.

This company’s concerns were echoed by others in the industry. Attached to this submission is a list of the tariff codes our members use, but I would like to highlight the five tariff codes that 50 percent or more of respondents indicated they use to import goods from China.

None of these imports are finished goods. They are all critical in the manufacture of components and end items, and they are all difficult to source domestically. Other tariff codes also relate to electronics manufacturing equipment and parts, including 84561170, 84561270, 84669396, 84798992, 84804100, and 85143010.

Respondents also expressed concern that the tariff increases would increase the cost of base materials to produce high-reliability electronics. Higher prices will depress demand among customers and will make U.S. manufacturers less competitive in the global marketplace. Another respondent also suggested the tariffs will create cost confusion in the marketplace and impose new administrative burdens as inventoried goods are mixed with newly imported goods. These concerns led one respondent to offer the admonition: “Don’t do this.”

IPC appreciates the U.S. Government’s heightened attention to intellectual property theft. As an industry association, IPC has sought to introduce tools, including industry-developed standards and best-practices, to help companies safeguard their intellectual property and that of their customers. Nevertheless, intellectual property theft remains a rampant problem globally. We support efforts among governments to secure binding and cooperative agreements to reduce intellectual property theft.
As we work to address intellectual property issues, we must not further undermine U.S. companies by imposing increased costs on them. Doing so will only weaken their competitiveness in the global economy and jeopardize their long-term sustainability at a time when the U.S. Government should be taking active measure to shore up the industrial base. Instead, IPC encourages the USTR to postpone new tariffs and prioritize bilateral negotiations with your Chinese counterparts and the pursuance of remedies under existing trade agreements.

Thank you again for the opportunity to comment on this proposed Determination of Action. If IPC can offer additional information or assistance, please contact Chris Mitchell, IPC vice president of global government relations, at ChrisMitchell@ipc.org or 202-661-8097.

John Mitchell
President and CEO

IPC Members: Your Voice is Needed in Washington, D.C. on May 21-23

Your presence is needed in Washington, D.C. Hearing from constituents like you, whose businesses are affected by their decisions, can have a significant impact upon policymakers. The more executives our industry can rally, the stronger our collective voice will be and the more likely we will have a positive impact. You can register for IMPACT at www.ipc.org/IMPACT-2018.

This event is a unique opportunity to join your industry peers and advocate on behalf of the electronics manufacturing industry for policy issues that can affect the way your company does business.

During this two-and-a-half-day event you will:
• Collaborate with industry executives who share your commitment to the industry;
• Learn more about the policy issues we face and deliver research-based positions and solutions to the U.S. Government;
• Speak with leaders in Congress and the Administration in support of our common priorities; and
• Address your company’s concerns and personal experiences.

This year, we will be advocating on issues related to:
• Regulatory reform;
• Strengthening the electronics industry supply chain; and
• Workforce and education

Dual-Use Export Controls Regulation: One to Watch for the Electronics Industry

The European Union is currently working to update its legislation on export controls for dual-use items, meaning items that can be used for both civilian and military applications and/or can contribute to the proliferation of Weapons of Mass Destruction (WMD). Most importantly, the proposal for an updated Regulation introduces the following changes:

• Expansion of list of dual-use items to include cyber-surveillance technologies and those that can be used for human rights violations.

• Added obligation for exporters, when conducting their due diligence, to notify Member State authorities, if they suspect exported items not listed in the Regulation are used to violate human rights.

• The European Commission is empowered to amend the list of dual-use items covered by the Regulation, so continuous monitoring of this process will be needed to ensure regulatory compliance.

The new Regulation does not include any specific mentions of printed circuit boards, but is nevertheless a piece of legislation that IPC members must be aware of, as it could create possible regulatory compliance issues. With that in mind, IPC has drafted a briefing note detailing the new provisions introduced by the Regulation, as well as the state of play and next steps in the legislative process. The updated proposal is currently being discussed by representatives of the European Commission, Council and Parliament in informal “trilogues”. It is possible that the updated Regulation will have gone through the legislative process in the course of 2019.

The more detailed briefing note on the new regulation on export controls on dual-use items can be found here: http://www.ipc.org/3.0_Industry/3.3_Gov_Relations/2018/Dual-Use-Export-Controls-Briefing.pdf.

IPC members are invited to share their feedback on this document and any other thoughts and concerns they might have on export controls for dual-use items with Chris Mitchell, IPC’s vice president of global government relations, at ChrisMitchell@ipc.org.