Important Advocacy Opportunity: How Is Your Company Affected by US EPA Action on High-Priority Substances?

Apr 09, 2020
By Kelly Scanlon, director, environment, health and safety policy and research, IPC The U.S. Environmental Protection Agency (EPA) released “scoping documents” for its upcoming reviews of certain high-priority chemical substances under the Toxic Substances Control Act (TSCA) Section 6(b). Your review of these documents is important because scoping is the foundation of the risk evaluation process that will eventually determine how EPA regulates or mitigates unreasonable risks. Several of the substances are relevant to electronics manufacturing – flame retardants, phthalates, solvents, and formaldehyde – and IPC will work with electronics manufacturers like you to ensure a thorough review of the draft scoping documents. You’ll recall that in 2019, the EPA designated 20 chemicals as high-priority (HP) substances for upcoming risk evaluations. EPA’s next step is to produce a scoping document for each chemical, identifying its conditions of use, hazards, exposures, and potentially exposed or susceptible subpopulations. On April 6, the EPA released drafts for 13 of the HP substances, and on April 17, the EPA released an additional seven drafts. Now is your chance to review these draft scoping documents; the current comment period is through mid-May for the first 13 drafts and the beginning of June for the remaining seven drafts.  The TSCA High-Priority Substances Sorted by Applicability to Electronics Manufacturing table and link below lists and provides links to all the designated HP substances; as well as the relevant draft scoping documents; and information from the draft about the substances’ possible uses in electronics. If your company manufactures, imports, processes, distributes, uses, or disposes of any of these chemical substances, then you will want to consider reviewing the drafts and providing information to EPA about the chemicals’ conditions of use. Please consider the following questions as you review the draft scoping documents and consider whether to prepare comments to the EPA in conjunction with IPC. • Did the EPA accurately identify this chemical substance’s use, based on your knowledge of electronics manufacturing and production processes? • If not, how would you describe the scenario of use for the chemical substance, including potential human or environmental exposures? • Does your company have access to or the ability to collect exposure data or information? • What is the chemical’s criticality to the process and the product? We will have several opportunities to engage with the EPA during the risk evaluations, but our effectiveness will depend on the quality of our information and insights, our members’ level of engagement, and our pro-active engagement and knowledge-sharing with the EPA TSCA team. Our collective mission is to help the EPA develop policies that accurately reflect the uses of these chemical substances in our industry, and properly balance risk and cost-effectiveness. IPC will continue to facilitate that effort, with your help. Please contact me with any questions or comments at KellyScanlon@ipc.org.

TSCA High-Priority Substances Sorted by Applicability to Electronics Manufacturing 

TSCA High-Priority Substances CASRN Draft Scoping Document Release Date Applicability to Electronics as Mentioned in Draft Scoping Document
Triphenyl Phosphate (TPP) 115-86-6 April 6, 2020 Flame retardant used in computer and electronic product manufacturing
Tris(2-chloroethyl) Phosphate (TCEP) 115-96-8 April 6, 2020 Flame retardant used in electronic products
4,4'-(1-Methylethylidene)bis[2,6-dibromophenol] (TBBPA) 79-94-7 April 6, 2020 Flame retardant used in production of electronical and electronic products
trans-1,2-Dichloroethylene 156-60-5 April 6, 2020 Solvent used for electronics degreaser and flux remover
1,1,2-Trichloroethane 79-00-5 April 6, 2020 Solvent used in plastic and petrochemical manufacturing; draft scoping document includes information regarding electronic materials and flexible printed circuit manufacturing
Formaldehyde 50-00-0 April 17, 2020 Plating agent; draft scoping document mentions use as a chemical substance in commercial and consumer electrical and electronic products.
Phthalic Anhydride 85-44-9 April 17, 2020 Industrial use as load absorber and industrial and commercial uses in electrical and electronic products; used in electronics adhesives (5 to 10% phthalic anhydride); used in production of plastic and rubber products including electronics.
Di-Ethylhexyl Phthalate (DEHP) 117-81-7 April 17, 2020 Phthalate used in consumer or commercial electrical and electronic products; used in adhesives for electrical tape; Phthalates DEHP, BBP, DBP, and DIBP were added to Annex II to the RoHS Directive 2011/65/EU, “Restricted substances referred to in Article 4(1) and maximum concentration values tolerated by weight in homogeneous materials.”
Butyl Benzyl Phthalate (BBP) 85-68-7 April 17, 2020 Phthalate with industry and commercial uses to include adhesives, sealants, floor coverings, paints and coatings, and use in plastic and rubber products; Phthalates DEHP, BBP, DBP, and DIBP were added to Annex II to the RoHS Directive 2011/65/EU, “Restricted substances referred to in Article 4(1) and maximum concentration values tolerated by weight in homogeneous materials.”
Dibutyl Phthalate (DBP) 84-74-2 April 17, 2020 Phthalate used in ink, toner, colorant products used in the electronics industry; consumer exposures from products and articles include electrical and electronic products; Phthalates DEHP, BBP, DBP, and DIBP were added to Annex II to the RoHS Directive 2011/65/EU, “Restricted substances referred to in Article 4(1) and maximum concentration values tolerated by weight in homogeneous materials.”
Di-isobutyl Phthalate (DIBP) 84-69-5 April 17, 2020 Phthalate; No specific electronic equipment uses listed in draft scoping document; Phthalates DEHP, BBP, DBP, and DIBP were added to Annex II to the RoHS Directive 2011/65/EU, “Restricted substances referred to in Article 4(1) and maximum concentration values tolerated by weight in homogeneous materials.”
Dicyclohexyl Phthalate 84-61-7 April 17, 2020 Phthalate with industrial use in adhesives and sealants in electronic product manufacturing; industrial use in plastic and rubber products in electronic product manufacturing
Di-isodecyl phthalate (DIDP) 26761-40-0, 68515-49-1 Expected later April 2020 (Possible use. This is a manufacturer-requested risk evaluation)
Di-isononyl phthalate (DINP) 28553-12-0; 68515-48-0 Expected later April 2020 (Possible use. This is a manufacturer-requested risk evaluation)
1,1-Dichloroethane 75-34-3 April 6, 2020 No mention of electronics production in draft scoping document
1,2-Dichloroethane 107-06-2 April 6, 2020 No mention of electronics production in draft scoping document
1,2-Dichloropropane 78-87-5 April 6, 2020 No mention of electronics production in draft scoping document
1,3,4,6,7,8-Hexahydro-4,6,6,7,8,8-Hexamethylcyclopenta[g]-2-Benzopyran (HHCB) 1222-05-5 April 6, 2020 No mention of electronics production in draft scoping document
1,3-Butadiene 106-99-0 April 6, 2020 No mention of electronics production in draft scoping document
Ethylene Dibromide 106-93-4 April 6, 2020 No mention of electronics production in draft scoping document
o-Dichlorobenzene 95-50-1 April 6, 2020 No mention of electronics production in draft scoping document
p-Dichlorobenzene 106-46-7 April 6, 2020 No mention of electronics production in draft scoping document
TSCA High-Priority Substances Sorted by Applicability to Electronics Manufacturing

Real-time Update on Electronics Manufacturing and COVID-19 – April 6, 2020

Apr 06, 2020
As health officials around the globe struggle to “flatten the curve” of coronavirus cases, the electronics manufacturing industry continues to face ambiguous operating restrictions, uncertain economic conditions, abnormalities in supply chains, and greater gaps in the workforce. Over the past week, IPC has continued to monitor the health of the electronics manufacturing industry amid the COVID-19 pandemic, including an ongoing series of calls with member company executives. The following observations are current as of April 6, 2020. Executives remain very concerned about the impacts of COVID-19. Some 43 percent of executives who replied to IPC’s latest online poll said they were “extremely” concerned, and 92 percent were “somewhat” or “extremely” concerned. Only 8 percent are neutral or unconcerned. Medical equipment production is ramping up. Some companies are reporting they have stopped making their usual products in order to produce inputs for medical equipment. According to IPC’s most recent online poll, roughly 7 percent of companies have stopped production of other equipment in order to create capacity for medical equipment. Companies continue to face a myriad of abnormal conditions. Eighty percent of executives who responded to our online poll reported a variety of supply constraints as a result of the coronavirus outbreak. Some 30 percent of respondents reported facing abnormal workforce issues; 30 percent reported abnormal shipping costs; 33 percent reported abnormal shortages; and 55 percent reported abnormal shipping delays. Roughly one in five executives (20 percent) reported they are facing no abnormal supply constraints. Slowing demand is slowing manufacturing output. Some companies report that they haven’t felt any pressure to ramp up production back to full capacity in China or elsewhere. Some believe that demand will return by the second half of 2020, but there remains significant uncertainty. Stockpiling or buying ahead not likely to happen. Some companies report they are not stockpiling supplies or buying ahead because “cash is king” in the current environment. Hardship and retention bonuses are appearing. Executives report a variety of approaches to employee compensation. Some companies are offering “supportive” or “supplemental” pay with the recognition that this is a more difficult time for some employees. Other companies report they are offering bonuses later in the year, when cash flows will be more certain, for employees who continue to show up throughout the crisis. Some companies are paying workers double-time immediately if they’ve worked more than 48 hours a week. Some companies are reporting bonus programs for the next 90 days to ensure they can retain critical mass within certain areas of the business. Executives weigh temporary leave versus layoffs or retention of workers after coronavirus. Some companies report they have workers on temporary leave (furlough) as work has dried up. The challenge is guessing what demand will look like after the worst of COVID-19 passes, and how many workers they will need versus possible layoffs of staff. Some expect strong backlogs. Some companies report their customers have strong backlogs, and they expect demand to improve as we emerge from the worst of COVID-19. Companies in the defense sector continue to report that orders are flowing, without signs of weakness. Safety committees are active. Companies report they continue to have a strong focus on employee safety. Some report they are convening their safety committees as often as daily to address any issues. Success stories: • Winchester Interconnect was selected by General Motors to help them manufacture Ventec ventilators. The company faced several issues as they ramped up, including tooling availability and lead times. They needed to borrow and rent applicators for two to four weeks while they waited for purchased units to arrive. IPC played a helpful role by sharing that request with the industry at large. Three different manufacturers and five different part numbers were involved, but the need was met within one day. “This is the kind of opportunity where we can come together as a community,” said IPC President and CEO John Mitchell. • Green Circuits was profiled by journalist Tim Aeppel of Reuters. Company CEO Joe O’Neil highlighted the challenges of staying operational in Santa Clara County, which was among the first U.S. localities to institute a shelter-in-place order. IPC Updates: IPC staff remains on the job working to support the needs of the industry. Visit IPC’s COVID-19 resource page at www.ipc.org/coronavirus to access more information about: • IPC’s Policy Roadmap for Economic Recovery • Industry needs and opportunities • Federal assistance for electronics manufacturers • Changes to IPC workforce training & certifications • Changes to IPC’s calendar of events and meetings • Ongoing IPC standards development activities For more information related to this Industry Update, please contact: John Mitchell President and CEO JohnMitchell@ipc.org Shawn DuBravac Chief Economist ShawnDuBravac@ipc.org Chris Mitchell Vice President, Global Government Relations ChrisMitchell@ipc.org        

An IPC Policy Roadmap to Economic Recovery

Mar 27, 2020
By Chris Mitchell, vice president, global government relations As the unprecedented COVID-19 crisis continues to unfold, IPC is calling for a bold, sustained policy agenda to help the electronics manufacturing sector weather the economic downturn and support the economic recovery. There can be no doubt that governments all over the world should take extraordinary measures to keep the electronics manufacturing sector healthy. According to new, soon-to-be published data from IPC, our industry supports more than 5.3 million U.S. jobs and drives more than $714 billion in U.S. GDP, almost 4% of total U.S. GDP. Every U.S. electronics manufacturing job supports an estimated three other jobs in the U.S. economy. Our industry’s role is equally important – and in some cases even more important – in the economies of other nations. Electronics are at the heart of thousands of products and hundreds of industries worldwide, with healthcare prominent among them. Our supply chains need to keep flowing to keep the overall economy growing. Over the last month, governments and central banks around the world have taken a series of actions to blunt the economic carnage. In the United States, IPC commended President Trump and Congress for reaching agreement on a $2 trillion economic stabilization package including $500 billion in loans and loan guarantees for hard-hit companies, including $17 billion for businesses critical to national security; plus another $350 billion targeted to help small businesses; and $50 million for the Hollings Manufacturing Extension Partnership, which helps small- and medium-sized manufacturers maintain and expand their markets. Moreover, the Federal Reserve’s decision to lower interest rates and inject cash into the nation’s financial system will help maintain liquidity at a time when firms of all size need it. Many other national, regional, and local governments have taken similar actions. And yet, we’re still on the front end of this emerging crisis, and more will need to be done. For all these reasons, IPC consulted with its members and industry experts and developed an IPC Roadmap to Economic Recovery, with additional steps that we recommend governments should take to help sustain our industry and the broader economy. Those steps are: Keep Essential Electronics Manufacturing Open
  • States and localities should adopt the Department of Homeland Security’s (DHS) definition for “critical infrastructure,” which covers factories related to defense and healthcare; commit to keeping these critical manufacturing facilities open; and ensure that curfews do not impede a healthy workforce from getting to and from manufacturing facilities.
 Support Supply Chain Resiliency
  • Congress should establish a $10 billion Electronics Manufacturing Initiative to enhance the resiliency and security of the nation’s electronics value chain by establishing public-private partnerships focused on the following priorities:
    • Capacity: Grow domestic capacity for electronics manufacturing and establish systems to monitor capacity in times of crisis.
    • Capabilities: Spur investment and R&D in artificial intelligence (AI) and other technologies that make U.S. manufacturers more globally competitive.
    • Workforce: Bridge the skills gap through more robust federal support for online workforce training and credentialing.
    • Resiliency: Establish metrics for industrial base resiliency with capacity, capabilities and geographic diversity as key factors.
    • Security: Integrate resiliency and security initiatives to strengthen the trusted electronics supply chain.
Spur Global Trade by Cutting Tariffs
  • The Trump administration should suspend the imposition of import duties through December 31, 2020 on all products from countries that agree to provide reciprocal treatment for U.S. exports; and allow companies to defer payment of import duties through December 31, 2020.
  • The Trump administration should reinvigorate negotiations with China on a “Phase 2” deal and suspend Section 301 tariffs on imports related to healthcare and other vital supplies necessary to combat COVID-19.
  • Congress should increase funding for U.S. export promotion programs, including the U.S. Foreign Commercial Service and Small Business Administration, to help U.S. manufacturers compete in the global marketplace.
Delay Non-Essential Rulemakings
  • The Trump administration should put a 90-day pause on non-essential regulatory rulemakings unless they are directly related to urgent public health, environmental health, or economic recovery efforts. We need our business leaders to focus on maintaining compliance with existing regulations while taking on appropriate pandemic response actions.  A 90-day pause on new proposals and implementation of new requirements will likely guarantee better compliance in due time.
Facilitate Shipping & Transportation Recovery
  • Governments at all levels should support the continued and robust operation of U.S. ports to ensure so that food, medical equipment and other vital supplies will continue to reach people.
  • Governments should incentivize airlines to expand cargo capacity and keep air freight rates on par with historical norms.
  • Congress should enact landmark transportation legislation that, among its goals, expands capacity on U.S. freight corridors.
 Support the Financial Security of Manufacturing Workers
  • The Labor Department should facilitate federal and state cooperation to allow companies to pay a portion of wages to underemployed workers who may be receiving unemployment benefits.
  • Congress should provide a tax credit for employers who continue to pay workers who are quarantined, have exhausted their allotted leave time, or have had their workplace shutdown.
Keep Manufacturing Workers Healthy
  • CDC should issue guidance related to cleaning processes, social distancing, and other operational practices that can help stem the spread of the virus in facilities that must stay open given the “essential” nature of their production.
  • Congress should enhance tax deductions for employers who invest in safety equipment, including hand washing stations, respiratory equipment and cleaning products.
These actions – expressed in terms aimed at U.S. policy makers but applicable to policy makers all over the world – would allow electronics manufacturers to serve the near-term needs of a world in crisis, while also providing immediate and long-term economic stimulus. If you agree with the proposals in the IPC Roadmap for Economic Recovery, I encourage you to download it and share it with your elected officials. The Roadmap will form the core of IPC’s advocacy agenda for the foreseeable future. Meanwhile, if your company is experiencing any problems or uncertainties caused by the government’s response to COVID-19, we want to hear from you and assist you. IPC’s coronavirus resource page, including webinars with industry experts and tips for what you can do, is here. If you would like to receive our weekly advocacy reports and occasional action alerts to get involved in our advocacy, visit our “A Team” page and sign up. As IPC President and CEO John Mitchell said in his keynote speech at APEX 2020, “This industry knows all about change. We are disruptors, and we are used to being disrupted ourselves. … The companies that will thrive amid the radical changes occurring all around us will be the ones who take responsibility and lead the change.” IPC will continue to be your partner and supporter through all the changes that lie ahead.    

Important Update Regarding the TSCA Fees Rule and Your Company

Mar 26, 2020
By Kelly Scanlon, director, environment, health and safety policy and research, IPC Over the past month, IPC has brought to your attention that the TSCA Fees Rule may apply to your company beginning in 2020 and that there could be several challenges for those who need to comply. Challenges include the requirement to self-identify as a manufacturer that imports articles containing high-priority substances and the subsequent requirement to form consortia with other manufacturers in order to make fee payments to the U.S. EPA for risk evaluations. IPC has worked with the EPA to bring awareness to these challenges via meetings with senior officials and through comments to the public docket. Those comments include both a request for an extension to the comment period as well as a collaboration with the Consumer Technology Association (CTA) and Information Technology Industry Council (ITI) to address concerns regarding burdens to the electronics industry around the requirement to self-identify as an importer of an article containing a TSCA High-Priority Substance. We are glad to report that on March 25, the EPA confirmed that it is exploring potential exemptions to the TSCA Fees Rule for manufacturers that: - import articles containing high-priority substances; - produce the chemical substance as a byproduct; and - produce or import the chemical substance as an impurity. This announcement means that the EPA is no longer expecting manufacturers in this category to self-identify under the TSCA Fees Rule. This potential regulatory relief could reduce long-term administrative and financial burdens for those manufacturers that fall into this category. Also, the EPA is providing a No Action Assurance to these manufacturers with respect to the self-identification requirements; the No Action Assurance establishes that the EPA will exercise its enforcement discretion to not pursue enforcement action for violations of the self-identification reporting obligations. Regardless of this proposed regulatory and enforcement relief, companies that were already erroneously identified by the EPA on their preliminary list of fee payers should still plan to certify in the EPA’s Chemical Data Exchange (CDX) system if they fall into this category. For all potentially affected stakeholders, IPC recommends that you: 1. Determine whether you are a manufacturer or importer of any of the HP substances or if you are an importer of articles containing HP substances, produce the chemical substance as a byproduct or as an impurity. 2. Review the preliminary lists of manufacturers and importers of HP substances as compiled by the EPA. Your company belongs on the list if it manufacturers or imports any of the substances. 3. If your company is listed incorrectly, then a correction notice must be submitted during the open comment period. Corrections are submitted through the Chemical Data Exchange (CDX) system. The EPA has modified the CDX to facilitate responses for those who fall into the potentially exempt category of manufacturers. Here are instructions for reporting to the CDX. 4. If you believe that your company needs to be listed, then you are required to self-identify through the CDX system. Please contact me with your questions regarding this update on the TSCA Fees Rule and its applicability (or lack of applicability) to your company.

European Union Pursues its “Circular Economy” Ambition

Mar 23, 2020

The European Green Deal – the first policy strategy put forward by the new European Commission (EC) that took office in December 2019 – is a sweeping plan that aims to reconcile the economy with the planet. Among its other objectives, the Green Deal sets a goal of achieving climate neutrality in Europe by 2050.

The Circular Economy Action Plan, adopted by the EC on March 11, 2020, is one of the flagship initiatives of this effort and will be at the heart of many European policy discussions for months to come. The plan is not legally binding, but it presents a set of 35 measures to be considered from 2020 to 2023 to ensure a cleaner and more competitive Europe. These measures, both legislative and non-legislative, will cover the entire lifecycle of products, ranging from design, production, and consumption to making sure resources are kept in the economy for as long as possible. The plan aims to make sustainable products the new norm in the EU and to make Europe the leader of such efforts at the global level. It calls for this to happen through “co-creation” involving industry, consumers, and civil society organizations.

The Circular Economy Action Plan asserts that up to 80 percent of the environmental impact of a product is determined during its design phase, and therefore the current linear model of “take-make-use-dispose” needs to change. To tackle this challenge, a Sustainable Product Policy Framework will be proposed to make products future-proof, climate-neutral and resource-efficient. The Ecodesign Directive, an existing EU law regulating energy- and resource-efficiency, will be extended beyond energy-related products, and the methodology behind it will be subject to a review. The Framework will be complemented, where necessary and appropriate, with sustainability principles to address aspects such as product durability, reusability, upgradability, and repairability, as well as chemical composition and overall carbon and environmental footprint. To grasp the benefits that digitization makes possible, a to-be-established digital product passport would bring together existing and new databases containing product information covering the entire product life-cycle.

Although the Circular Economy Action Plan covers several product value chains, electronics and ICT are top concerns because they represent some of the fastest-growing waste streams in the EU, with current annual growth rates of 2 percent. A Circular Electronics Initiative will focus on regulatory measures to promote longer product lifetimes, with a primary focus on mobile phones, tablets, and laptops, and bringing those under the Ecodesign Directive.

Consumers will play a crucial role in the transition; their choice of products and consumption patterns affect the entire economy. Consumers need to receive trustworthy information about their products, including aspects such as lifespan, repair options, manuals, and availability of spare parts. These policies will be part of a new initiative called Right-to-Repair, which could affect electronics product design, manufacturing, and service delivery, including requiring spare parts and repair manuals to be available to third-party professional repairers.

When it comes to chemicals, the European Commission is planning to present a new methodology and approach towards regulating hazardous chemicals under the upcoming Chemicals Strategy for Sustainability, which is expected to be finalized in October 2020. The strategy will mark a new phase in the long-running interface between product, chemicals and waste, seeking to balance what are often seen as conflicting interests: on one hand, improving recycling and uptake of secondary materials, and on the other hand, substituting for substances of concern.

Although there are already efforts in place to promote a toxics-free environment by adopting substitutes for hazardous substances, the safety of secondary materials can be still compromised. The EC will therefore work on methodologies to minimize the presence of substances of concern in recycled materials and develop harmonized systems to track those substances across the supply chain. As of January 2021, companies supplying articles containing substances of very high concern (SVHCs) will need to submit information on these articles to the European Chemicals Agency (ECHA) via the SCIP database. There also are indications in the Circular Economy Action Plan that the Commission is looking into extending the current scope from SVHCs to substances of concern (SoC), despite the lack of a clear definition of the latter.

At the same time, the EC is set to review the current Directive 2011/65/EU on the restriction of the use of certain hazardous substances in electrical and electronic equipment (RoHS) by 2021.

The upcoming months will present several opportunities for engaging with EU institutions and stakeholders in shaping all these initiatives. IPC, which is uniquely positioned to represent the entire electronics supply chain, is working on two research reports on traceability of substances and lifecycle analysis, and the association will continue to engage directly in these policy discussions. IPC members with relevant information and opinions should contact Alison James, IPC Senior Director for Europe, or Kelly Scanlon, IPC Director, EHS Policy and Research.

 
 

The Coronavirus Outbreak Will Likely Impact New Product Introductions

Mar 17, 2020
By Shawn DuBravac, IPC chief economist and Matt Kelly, IPC chief technologist According to IPC’s recent Coronavirus impact study (March update), roughly 22 percent of electronics manufacturers and suppliers reported that the coronavirus outbreak will result in fewer new product introductions (NPIs) in 2020. In a normal year, original equipment manufacturers (OEMs) would be readying production of new products to be released in the coming year. This is especially true for consumer electronics manufacturers, which tend to follow six- to 12-month cycles and aim to release NPIs in the fall months just ahead of the holiday shopping season. Electronics manufacturers in the OEM supply chain would generally prepare for NPIs by traveling several times to visit input suppliers in the lead-up to full-scale production. Each of these trips would last up to a few weeks and would involve all aspects the NPI process, including design tweaks, incoming component supply, assembly and test process definition, product qualification, reliability assurance, manufacturing yield assessment, and final product fulfillment models – all in preparation to support ramp to volume production requirements. Corporate travel bans have cancelled many of these trips and left engineering teams rushing to develop alternative approaches. Some are turning to U.S. firms to help. Because build schedules are already extremely tight, delays of any kind could impact planned product release dates. In short, the coronavirus outbreak is causing delays that could affect planned NPIs. Some companies are already reporting such impacts. Arlo Technologies, a maker of wireless security cameras, noted in its fourth-quarter 2019 financial results conference call that “coronavirus is impacting our business on the supply side as our vendors do not have sufficient quantities of the required components to fulfill our demand … Additionally, in the second quarter, we have new product introductions planned that we believe will be impacted by the component shortages, as well as delayed delivery of some of the manufacturing equipment from China.” Logitech noted in a statement that “due to the availability of labor and varying timing of component supply recovery, there is potential for delays to new product introductions.” Because of the long lead times involved, timing constraints and travel bans that hinder collaboration between designers, engineers, and manufacturing facilitates could also impact NPIs in 2021, even if other impacts from the coronavirus outbreak are reversed quickly. To read full report, click here.

Electronics Supply Chain in Flux Due to Tariffs, Epidemic, Other Factors

Mar 02, 2020
by Shawn DuBravac, IPC chief economist Over the last year, electronics manufacturers have been adjusting their supply chains, driven by a variety of factors but especially trade tensions between the United States and China and the growing expectation that higher tariffs between the U.S. and its partners may be “the new normal.” More recently, the coronavirus epidemic that originated in China and now is sweeping the world is driving further decoupling between China and the United States. A recent IPC survey of its members revealed an overwhelming majority (84 percent) were worried about the epidemic’s impact on their business operations, with some looking to develop alternative sources of inputs from other countries. The primary beneficiaries to date include countries with competent workforces, modern infrastructure, and congenial business environments, including Mexico, Vietnam, Indonesia and Taiwan, where we do see some elements of the electronics supply chain expanding. If your company is contemplating or in the process of sourcing from new countries instead of China, I would be interested in hearing from you as part of IPC’s ongoing research and monitoring efforts. Your information will be held in confidence, although we are always looking for members who are willing to share their insights and experiences with reporters and policymakers.

Coronavirus Expected to Cause Five-Week Product Shipment Delays, Says Electronics Manufacturing Industry

Feb 26, 2020
Electronics manufacturers anticipate at least a five-week product shipment delay from suppliers due to the coronavirus epidemic, according to a survey conducted by IPC.  Shipping delays from China and other countries where the virus has spread are already having negative impacts on manufacturers. Roughly 65 percent of manufacturers report their suppliers expect, on average, a three-week delay. However, electronics manufacturers expect delays to be longer than what their suppliers are currently quoting. On average, executives expect shipment delays to be at least five weeks. “The delays will likely have ripple effects for the rest of the year,” said John Mitchell, IPC’s president and CEO. "The longer China is affected by the epidemic, and the more it spreads to other parts of the world, the supply chain will experience more and varied strains and disruptions.” An overwhelming majority (84 percent) of electronics manufacturers and suppliers are worried about the epidemic’s impact on their business operations. Delays in receiving supplier inputs can lead to factory downtime, higher average costs, transportation bottlenecks, pressure for alternative sourcing, delayed sales, and delayed prototyping that slows the introduction of new products. “In most cases, it’s not easy for manufacturers to switch suppliers, if that’s what turns out to be necessary,” added Mitchell. “Securing alternate sources requires an investment of significant time and money that must be weighed against the value gained.” IPC surveyed industry professionals at electronics manufacturing companies, including original equipment manufacturers (OEMs), electronics manufacturing services (EMS) companies, and printed circuit board (PCB) fabricators. Almost half of the survey respondents represent the contract electronics manufacturing services (EMS) industry. This segment performs an estimated 25 percent of North American electronics manufacturing for OEMs. The survey was conducted between February 11–16, 2020. IPC will continue to perform regular surveys and research on this issue.

U.S. EPA Fees for Toxic Substances May Apply to Your Company This Year

Feb 26, 2020
By Kelly Scanlon, director of environment, health and safety policy and research Manufacturers and importers of “high-priority substances” and importers of articles containing these substances may be obligated to pay fees this year to defray the U.S. EPA's costs for administration of the Toxic Substances Control Act (TSCA). Many companies may be unaware of these potential fee obligations, especially importers of articles that contain HP substances by design or as byproducts or impurities. The regulation imposing these fees – the “Fees Rule” – went into effect in October 2018, but the obligation to pay the fees kicked in this year, as the EPA launched new risk evaluations for 20 substances. Companies should be diligent when determining the potential impacts of the Fees Rule. For starters, the EPA has opened a comment period during which companies have the opportunity to review preliminary lists of manufacturers and importers of HP substances. The preliminary lists were developed using the most up-to-date information available, including information submitted to the EPA under the Chemical Data Reporting Rule and the Toxics Release Inventory. However, EPA has indicated that the preliminary list may not be comprehensive, and companies involved in manufacturing or importing HP substances are required to self-identify to the EPA or be subject to daily fines. Thus, it is critical for companies to undertake the necessary due diligence prior to the end of the comment period, which is May 27, 2020. If a company believes it has been listed wrongly, it should consider filing a "certification of no manufacture" or a "certification of cessation" to be removed from fee obligations. Conversely, companies that do handle these substances must self-identify or face the risk of significant penalties. The potential size of the fees is hard to estimate. The EPA has determined that the HP risk evaluations will cost about $1.35 million per substance, and the costs will be distributed among all companies on the final list for each substance. The fees will vary from one substance to another depending on the number of impacted entities and a few other variables. For example, small businesses are expected to receive an 80 percent discount on fee obligations. Also, the Fees Rule allows entities to form consortia to divvy up the fees among themselves, a provision that is intended to ease compliance burdens for both the entities and the EPA. If a company does not join a consortium, then the EPA will dictate the fee amount it owes. What do you need to do by May 27? 1. Determine whether you are a manufacturer or importer of any of the HP substances or if you are an importer of articles containing HP substances. 2. Review the preliminary lists of manufacturers and importers of HP substances as compiled by the EPA. Your company belongs on the list if it manufacturers or imports any of the substances or if it imports articles containing HP substances. At present, there are no exclusions or exemptions for articles; there is no de minimis level for reporting; there are no volume or quantity thresholds for reporting; and there are no exclusions for byproducts and impurities. Here is some guidance should you need to know how the EPA defines “manufacturer,” “importer,” or “article.” 3. If your company is listed incorrectly, then a correction notice must be submitted during the open comment period. You can submit a comment to the open docket, or IPC can do this for you. 4. If you believe that your company needs to be listed, then you are required to self-identify through the Chemical Data Exchange (CDX) system. You will need to submit at least your company’s information and a technical point of contact. Here are some additional dates to be mindful of. It is expected that companies will have 60 days after the release of the final scoping documents to form consortia.  Impacted companies will need to determine whether they want to join any consortia and to join if they wish to do so. Approximately 120 days after the final scoping documents are released, the TSCA fees will be due to EPA. What else can you do? Review the draft scoping documents for the risk evaluations. Likely beginning in April 2020, the EPA will release the draft scoping documents for each of the 20 HP substances. IPC will be tracking these documents and providing updates to its members. The scoping document is the first step in the risk evaluation process, and providing evidence-based information to the EPA about your understanding of a substance will enable the EPA to identify relevant conditions of use in the risk evaluation. Also, there should be a good correlation between uses of the HP substances that are subject to risk evaluations and those who are obligated to pay TSCA fees to support the risk evaluation. Keep in touch with IPC. Let us know your questions, concerns, and suggestions about the TSCA fee obligations. To date, IPC has engaged with the EPA senior staff responsible for implementation of the Fees Rule to voice the electronics industry’s concerns regarding self-identification for those who import articles containing HP substances. You may also sign up to receive the weekly IPC Global Advocacy Report to stay informed on this subject and all the latest electronics-relevant environmental policy happenings. Any questions? Just drop me a line.

TTM Technologies Inc.'s Sustainability Efforts Recognized by U.S. EPA

Feb 18, 2020
By Kelly Scanlon, director, environment, health and safety policy and research, IPC Kudos to IPC-member company TTM Technologies, Inc. for reducing air and water emissions while continuously improving their printed circuit board production processes. On February 11, 2020, the Sterling, Va. facility was recognized by the U.S. Environmental Protection Agency (EPA) Regional Administrator and the Region 3 Director for Land, Chemicals, and Redevelopment Division for these improvements as demonstrated by the Toxics Release Inventory data from 2018. TTM’s Sterling facility has optimized production processes resulting in reduced air emissions of ammonia and reduced quantities of nitrate compounds discharged to the local water treatment facility. In addition, TTM educates it customers and staff about chemical and material selections resulting in reduced off-site transfers of lead and copper sent for recycling. The company is passionate about what it makes as well as how sustainably it makes it. Printed circuit board fabrication in the United States is essential to defense systems and other critical applications. Producing these essential products reliably and without increased cost to the environment is a challenge that TTM Technologies has taken head on. “TTM’s lean management system enables them to demonstrate continuous improvement across all that they do and the Sterling facility is no exception,” said Chris Mitchell, IPC vice president of global government relations. Across the United States, TTM is investing its capital and engineering intelligence -- the skills of its own employees, to design, fabricate, and install new Ion Exchange (IX) wastewater treatment systems. In 2019, the Sterling facility’s IX system came online and it is expected that this will further improve the company’s water footprint through increased capacity and improved metal recovery efficiency. IPC worked with the Sterling facility staff to host the EPA’s Smart Sectors Program and Toxic Substances Control Act (TSCA) staff for a tour of the new IX system in July 2019. Read more here. We look forward to this facility’s and this company’s efforts to shape and define achievable sustainability goals.
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