BY TOM MUPRHY

As the electronics manufacturing industry copes with a drought situation in Hsinchu Science-based Industrial Park (HSIP) in Taiwan, the real question is will corporate captains maintain their operations on the island or grow weary of the political squabbling that has delayed resolution of the issue and move their operations to mainland China?

While the Taiwanese government is reacting now to alleviate critical water supply shortages in the northern part of the country, its inability to act sooner may spark off a huge exodus to China, according to Iris Huang, an analyst with iSuppli Corp. of El Segundo, Calif.

Both United Microelectronics Corp. (UMC) and Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) have said the lack of rain in recent months would not disrupt their production, and they are confident that plans for future infrastructure improvements will maintain a stable water supply for their foundry operations. Despite these actions, water consumption at the industrial complex continues to grow by 25 percent a year.

Both UMC and TSMC say they have developed contingency plans to deal with water shortages if seasonal rains don’t start by the end of this month as predicted.

Huang estimated that the HSIP, located near Taipei, has about a 50- day supply of water to serve its tenants. Both UMC and TSMC have their headquarters in the park as well as other semiconductor and LCD manufacturers. The Taiwanese govemment will act to take farmland out of production and transfer the water supply to the HSIP.

But according to Huang, some manufacturers are not pleased with the government’s inability, to act sooner to alleviate the water supply situation. Although weather forecasts predicted dry weather at the beginning of February, the government has acted only recently to bring about a solution. Huang said.

“[Government officials] knew back in February of the water situation, but there is a feeling they didn’t make the proper decisions then,” Huang said. Political differences among decision-makers may have hampered the ability to produce a solution sooner, she said.

Because of the inability to settle this situation through political means, more industrial leaders may chose to relocate their operations to China, Huang said.

However, a TSMC spokesman said the company has no plans to locate any of its operations in China. The company is also confident that plans for the construction of additional pipelines and an additional reservoir to serve the park will alleviate the water supply situations in the future.

“Although it is true that the water supply at the main reservoir serving Hsinchu has reached low levels, water levels at other reservoirs are at acceptable levels,” a UMC spokesman stated. “In order to best serve our foundry customers, UMC has taken the necessary measures to ensure that production in its fabs continues uninterrupted.”

Individual companies may resort to ground water pumping or trucking in water supplies to But those measures add significantly to the cost structure of manufacturing chips, Huang said.

Adding to the water woes in northern Taiwan are powerful incentives by government agencies in China to lure the electronics industry to the mainland, Huang said. The government is also promising to provide the necessary infrastructure to assuage water worries in industrial areas near Beijing and Shanghai, she said.

While Taiwan’s unusually dry weather may soon pass, the water situation there may also be the result of the increasing industrial use in the HSIP, as water consumption has grown by more than 25 percent a year. When the park was founded, daily water consumption averaged 3,000 metric tons, Huang said. The consumption from the science park has now grown to more than 125,000 metric tons per day.

But taking more agricultural lands out of production may be an increasing part of solving HSIP’s water woes. An estimated 85 percent of the country’s water is dedicated to farming, but the island nation still imports a great deal of its food, Huang said. In contrast, the HSIP produced $8.2 billion worth of products shipped world- wide in 2001.

Electronic News March 11, 2002

Ewaste: A Growing Problem

Report finds U.S. electronics recycling gets shipped overseas

BY JEFF CHAPPELL

A recent investigation revealed that much of the electronics turned over for recycling in the United States ends up in Asia, where it is either disposed of or recycled with little to no regard for environmental or worker health and safety.

The report, “Exporting Harm: The High Tech Trashing of Asia” brought the disposal and recycling of obsolete electronics, or e-waste, to the fore, as it spawned stories in such mainstream media outlets as the New York Times. The Seattle-based Basel Action Network (BAN) and San Jose-based Silicon Valley Toxics Coalition (SVTC) coordinated the field investigation and ensuing report.

With product cycle times shrinking all along the electronics supply chain, the amount of obsolete electronics is clearly growing rapidly. “The 1999 Electronic Product Recovery And Recycling Baseline Report”, prepared by Stanford Resources Inc. for the National Safety Council, concluded that in 1998 some 20.6 million computers became obsolete in the United States alone. The report predicted that number would top 50 million by this year.

The report from BAN and SVTC indicates that between 50 percent and 80 percent of electronics collected in the western United States for recycling is shipped overseas. “While there are many e-waste recyclers who espouse and practice sincere environmental ethics ... there are many others whose recycling claims offer false solutions: recycling via export directly or indirectly through brokers,” the report stated.

BAN and SVTC acknowledge it is tough to precisely track how much e-waste is getting shipped overseas for recycling or disposal. Under the global Harmonized Tariff System, exported obsolete electronics are classified the same as new electronics. But electronics recycling industry insiders acknowledge that overseas disposal frequently occurs. “It is a big problem, and unfortunately there are no international or federal regulations on what goes on,” said Richard Campbell, senior VP of DMC.The Electronics Recycling Co. DMC is an ISO 14000-certified company that only deals with institutional and large corporate customers. It does all of its recycling and resource recovery domestically, guaranteeing customers immunity from disposal-related liability and that it won’t dispose of electronics in landfills, Campbell said.

But some companies presenting themselves as recyclers merely arrange to have waste shipped overseas, Campbell noted. He estimated that between 50 percent to 60 percent of domestic e-waste gets exported, adding that the number could be higher. “Some people make no bones about doing this,” he said. “It’s no secret it’s been going on for a longtime.”

BAN and SVTC found that the bulk of e-waste exports end up in China for disposal and recycling. It is lax enforcement of laws combined with cheap labor and favorable U.S. export laws that encourage the problem, the environmental groups’ report said.

With the cooperation of environmental groups in China, Pakistan and India, BAN attempted to document the conditions under which this e-waste was being recycled or disposed as well as the conditions of the work environment of these facilities overseas. It closely examined a processing center in Guiyu, China, conducting interviews, taking video and still photographs, and taking sediment, soil and water samples in and near Guiyu.

While the groups acknowledged that the study was not a comprehensive investigation, it nevertheless uncovered significant problems in all three countries. Investigators were furthermore able to identify the source of much of the e-waste that they saw, thanks to institutional labels, markings and maintenance stickers and phone numbers on PCs and peripherals.

Investigators found significant groundwater contaminants in Guiyu, contaminants that corresponded closely to the materials found in electronics. “A tremendous amount of imported e-waste material and process residues are not recycled but simply dumped in open fields, along riverbanks, ponds, wetlands, in rivers and in irrigation ditches,” the report said..

This is the first part of a two-part series on electronics recycling and disposal.

Electronic News March 11, 2002

Will EU legislation solve e-waste problems or are they here to stay?

BY JEFF CHAPPELL

While U.S.-based environmental groups hail environmental-related electronics recycling and manufacturing initiatives under consideration in the European Union (EU), industry groups question where the initiatives are viable for the electronics industry.

While this debate is ongoing, the latest chapter follows the release of a report entitled “Exporting Hann: The High Tech Trashing of Asia.” The Seattle- based Basel Action Network (BAN) and San Jose-based Silicon Valley Toxics Coalition (SVTC) coordinated the field investigation. The ensuing report found that much of the obsolete electronics collected domestically for recycling is actually shipped abroad, typically to China, where it is disposed of or recycled with little or no regard to environmental and worker health and safety.

The European Solution

It’s been a long, bureaucratic road spanning more than a decade, but in June 2001, the European Commission came out with two directives titled Waste from Electrical and Electronic Equipment(WEEE) and Restriction on the Use of Certain Hazardous Materials (RoHS).

WEEE in its current form requires manufacturers to collect, treat, recycle and reuse the electronic products they produce — not only new electronics, but older electronics as well, those that have existed since the beginning of the EU RoHS bans the use of lead, cadmium, hexavalent chromium, mercury and certain flame-retardant materials sometime toward the end of the decade.

The initiatives still have several bureaucratic hurdles to clear before they’re adopted. Observers don’t expect the WEEE and RoHS legislative process to be complete until February of next year, after which member countries will have 18 months in which to comply by passing new laws or amending existing laws.

Whatever form WEEE and RoHS eventually take, industry observers here and abroad say it’s only a matter of time until they become a fact of life.

Environmental groups, including the authors of the “Exporting Harm” report, welcome the WEEE and RoHS directives as solutions to the problems outlined in the report and would like to see similar laws put into effect in the United States. SVTC and BAN, among others, would also like to see the U.S. government ratify the 1989 Basel Convention treaty and its 1994 amendment.

The Basel Convention, ratified by 148 countries, calls for all member countries to reduce hazardous waste exports to a minimum and to deal with hazardous waste disposal within their own borders. The United States signed the Basel Convention treaty; it has yet to ratify it.

The 1994 amendment calls for a ban of hazardous waste export from certain countries, including all member countries of the Organization of Economic Cooperation Development (OECD), which includes the United States, to certain lesser-developed Basel Convention member nations, among them China. Twenty-seven countries have ratified the ban amendment so far, including most of Europe and China.

In “Exporting Harm,” SVTC and BAN criticize the electronics industry and particularly the federal government for exempting e-waste from hazardous waste laws in order to encourage export.

“Rather than working to fulfill the global obligation of national self-sufficiency in waste management set forth in the Basel Convention, the United States is actually investing time and money in developing a program to establish minimum criteria for environmentally sound management for countries to follow. The United States then hopes to eventually promote exports to developing countries that meet these minimum criteria. This work is being heavily promoted by the United States and is being formulated within the OECD’s framework.

“The goal of all of this is to be able to continue exporting wastes to developing countries in Asia and elsewhere via the password of recycling,” the report states.

An Industry Rebuttal

U.S.-based electronics consortia counter that much of what is sold here is fabricated in Asia and produced by Asian-based companies.

“We do not support any recycling operation that fails to achieve proper safety and environmental standards..., To facilitate sustainability, exporting in a globalized economy needs to be a viable option. If we want to put these materials back into the manufacturing cycle... we must find cost-effective, environmentally responsible and safe ways to move and recycle electronic equipment in the global marketplace,” the Electronics Industries Alliance (ELA) said in a statement.

As for the European directives, the EIA’s sister organization, the American Electronics Association (AEA), has been heavily involved in lobby efforts as the directives move through the EU legislative process.

“RoHS has been more problematic to us as a high-tech industry,” said Jennifer Guhl, director of international trade policy. It will be difficult to replace the substances cited in the RoHS, particularly lead, within the 2006 and 2008 deadlines currently being considered, Guhl said.

Another problem with the proposed RoHS ban is that no analysis is being done on the environmental impact of alternative chemistries, said the AEA.

Jason Linnell, manager of environmental affairs for the ELA, noted that removing some of the chemicals cited in RoHS also poses environmental dilemmas. Most lead-free solders, for example, have higher melting points, which require more energy to fabricate. Part of the reason LCDs are much more energy efficient than standard cathode ray tube (CRT) monitors is the use of mercury.

Editor’s Note: this is the second part of a three-part series examining the problem of e-waste.

Electronic News March 18, 2002