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News and New Products
Partially Leaded, Partially Unleaded
By Amy Wang -- Electronic News, 10/27/2005
Lead-free is taking hold in China’s electronics manufacturing, while a broader set of “green” regulations are being studied at the national level.
The recent Nepcon South/EMT South China, which took place last month, provided a glimpse into how China’s electronics manufacturers are embracing the new regulations.
Nepcon Fall runs in Shenzhen and Spring in Shanghai. Both are critical gatherings for electronics manufacturers, electronics equipment providers and electronics materials suppliers worldwide.
“RoHS’ [Restriction of Hazardous Substances] immediate influences on [the surface mount technology] sectors involve the ‘lead-free’ issue,” said Manbo Su, secretary general of the newly established Guangdong Electronic Association SMT Committee. “As a result, materials, equipment, components and PCB suppliers are launching lead-free solutions that are in compliance with the EU’s directives.”
“Lead-free” is the buzzword that SMT and soldering equipment vendors pitch customers, because RoHS does not quite resonate in China. To boost RoHS awareness, Nepcon organized a conference on the directive’s impact on electronics manufacturing.
Whether it is lead-free or RoHS, equipment vendors are being proactive with next-generation products because they consider demand for new equipment to be the best business opportunity in 30 years. Equipment vendors in China, such as Folungwin and JT Electronic Equipment, see a big opportunity in exporting their products and, therefore, see environmental compliance as a prerequisite.
Headquartered in Hong Kong, Folungwin set up manufacturing facilities in Dongguang and Suzhou. The company provided a lead-free reflow soldering oven, a lead-free dual-wave soldering oven and a lead-free computerized dual-wave soldering oven for major Japanese OEMs’ China operations, Nokia, and local OEMs such as Haier Corp. and Media Corp.
“We started supplying lead-free ovens last year,” said Jian Liu, sales engineer at the company. “We are selling 150 lead-free units -- priced from $30,000 to $40,000 -- per month. The market demand is growing rapidly because lead-free has become the trend in product development.”
Liu and his colleagues believe the market demand for lead-free equipment will grow dramatically in next five years.
Similarly, JT Electronic Equipment based in Shenzhen has provided lead-free ovens to Foxconn, Flextronics and Huawei Technology. The company’s products usually are one-third to one-half the price of Japanese ovens. Mingbo Shi, sales engineer at JT, said its top customers have adopted lead-free products for both export and domestic sales. He believes lead-free will be adopted by small and midsize Chinese manufacturers over the next three to five years due to increased export orders and Chinese environmental regulations.
Currently, both Folungwin and JT Electronic Equipment still supply traditional leaded equipment to local manufacturers that are not involved in exportation. The companies noted that Japanese manufacturers are one of the key drivers of lead-free equipment in China. Japanese companies adopted lead-free equipment three years ago because Japan restricted lead usage in electronics products at that time.
But Su of the Guangdong STM Committee doesn’t believe Chinese manufacturers will use lead-free process if they have other choices, in part because of the higher cost. Lead-free equipment is 15 percent more expensive than traditional equipment and lead-free soldering materials are about 20 percent more costly than traditional materials. Industry groups believe overall manufacturing costs will increase 3 percent after the adoption of lead-free processes. The higher cost is the reason that small and midsize Chinese manufacturers are hesitating because they are not pressed by export orders.
Manufacturing technique change is another challenge. “Cost is something you can see,” said Su. “I think the biggest problem lies in the technology side, which in turn will influence the quality of products and increase the total cost.”
Lead-free materials require more complicated techniques and higher temperatures during the soldering process. In addition, manufacturers will be required to source new components and ensure quality and yield of products. All these will add to the total cost of production, which is significant because many small Chinese manufacturers have a profit margin of less than 10 percent.
Su doesn’t believe Chinese manufacturers will take that risk immediately if they don’t intend to reach the overseas market. The common thinking among Chinese manufacturers is that they will closely watch the EU’s directive.
China is developing its own version of RoHS, as well as studying the overall cost of going totally green. But most Chinese manufacturers don’t believe the indigenous version of RoHS will work because there is no supervision system to monitor manufacturing processes. Even if the regulation is published, there is doubt internally that the government can oversee manufacturing in 31 provinces in China.
