Survey: RoHS Costs at Over $32 billion
Published: 21 April 2008
by Staff
ARLINGTON, VA - A survey of OEMs, electronics manufacturing services (EMS) providers and component manufacturers finds that initial compliance to the Restriction of Hazardous Substances (RoHS) initiative has cost the electronics industry $32 billion.
More than 200 companies were surveyed by the Technology Forecasters of the Consumer Electronics Association (CEA). The study reported that the average cost per company was $2.64 million to achieve initial compliance, and another $482,000 to maintain annual maintenance. Total compliance costs for the industry total 1.1% of industry revenue, according to the study.
Not surprisingly, the survey found that RoHS regulations resulted in higher inventory and product costs. According to the study, 57% of the companies surveyed reported a rise in inventory. Of that group, the average increase in inventory was 21% and the average cost for carrying the inventory was reported at $688,000.
77% of the companies surveyed also reported that RoHS regulations increased component, module and manufacturing costs, with average cost increase at 11.6%, and that 5 to 10 full-time employees were assigned to assure compliance with the new regulations. Most of that manpower was drawn from an existing employee base, rather than hiring additional employees for RoHS regulation compliance, says the survey.
About 29% of companies surveyed reported lost sales due to RoHS regulations, averaging $1.84 million, due to delays in new product sales and lost business in the EU.
However, some companies surveyed did report some advantages to RoHS, with almost 25% saying that the company had improved its supply chain process, 20% reporting an advantage in that it reduced the number of products offered, and about 15% saying that their company gained market share as a result of RoHS.
More than 200 companies were surveyed by the Technology Forecasters of the Consumer Electronics Association (CEA). The study reported that the average cost per company was $2.64 million to achieve initial compliance, and another $482,000 to maintain annual maintenance. Total compliance costs for the industry total 1.1% of industry revenue, according to the study.
Not surprisingly, the survey found that RoHS regulations resulted in higher inventory and product costs. According to the study, 57% of the companies surveyed reported a rise in inventory. Of that group, the average increase in inventory was 21% and the average cost for carrying the inventory was reported at $688,000.
77% of the companies surveyed also reported that RoHS regulations increased component, module and manufacturing costs, with average cost increase at 11.6%, and that 5 to 10 full-time employees were assigned to assure compliance with the new regulations. Most of that manpower was drawn from an existing employee base, rather than hiring additional employees for RoHS regulation compliance, says the survey.
About 29% of companies surveyed reported lost sales due to RoHS regulations, averaging $1.84 million, due to delays in new product sales and lost business in the EU.
However, some companies surveyed did report some advantages to RoHS, with almost 25% saying that the company had improved its supply chain process, 20% reporting an advantage in that it reduced the number of products offered, and about 15% saying that their company gained market share as a result of RoHS.
