China Eyes EU Environmental Directives
COLLEGE PARK, MD. – China’s government authorities are increasingly looking to not just Europe’s electronics takeback directives – the EU’s Waste Electrical and Electronic Equipment (WEEE) and the Restriction on the Use of Certain Hazardous Substances (RoHS) – but they are looking at six other environmental directives, according to Richard Ferris, a China legal expert and a partner at the international law firm of Holland & Knight LLP.
The other directives include the End of-Life Vehicles directive, the proposal on Registration, Evaluation, and Authorization of Chemicals (REACH), and the proposed directive on the Setting of Eco-design Requirements for Energy-using Products (EuP).
“We are pretty sure the Chinese agency officials involved are sensitive to the importance of harmonizing their approach with the WEEE and RoHS directives,” says Ferris. “However, there are aspects of the proposed Chinese laws addressing WEEE and RoHS that are uniquely Chinese. In the RoHS context, these aspects include marking and labeling provisions.”
Ferris also notes that the implementing details for the proposed Chinese RoHS regulation are at the early stages of development. Thus, issues, such as the exemptions procedures that the Chinese authorities will employ, are not yet clear.
The “China RoHS” is being developed by the Ministry of Information Industries, and the electronics takeback and recycling law initiative (e.g. “China WEEE”) is being led by the National Development Reform Commission (NDRC, also referred to as SDRC).
The new electronics regulations will have a major ripple effect on many of China’s small- and medium-sized manufacturing enterprises supplying many multinational U.S. and European companies. “There will be a shakeout,” Ferris acknowledges. “In order to do business with multinational customers, they likely have to accommodate new supplier RoHS specifications for Europe. These specifications will soon reflect China’s new RoHS requirements as well.”-Lee Mather
Upside to 2005 Downturn: It’ll be Short
HALF MOON BAY, CALIF. – This year’s semiconductor market downturn will be short and relatively painless, according to analysts at last month’s SEMI ISS ’05 in Half Moon Bay, Calif. Growth of semiconductor device sales this year is expected to be flat, while chip equipment sales will drop from 10 to 15%. Excess inventory currently in the supply chain will be worked out of the system by the second quarter and second half of this year, the analysts are predicting.
Semico Research Corp. is forecasting a 4.7% decline in the semiconductor device market this year, after 28% growth in 2004. “Although we’re calling for a decline, we don’t believe it’s going to be as steep or as long as the previous decline,” says Jim Feldhan, president of Semico. “Double-digit semiconductor growth will resume in 2006, at 14.6%.”
Longer term, Feldhan is optimistic about the prospects for capital equipment market growth because of the rapid move toward more advanced semiconductor manufacturing technologies in 2004. Only 3% of wafer demand was for 90-nm technology, whereas Semico reports that 90- and 65-nm nodes are expected to account for 27% of wafers in 2008.
IC Insights is forecasting a decline of 2% in device sales this year, and 8 to 10% growth next year. Structural changes in the industry, such as the increasing role of wafer foundries and a lengthening period between technology nodes, should lead to more efficient capital spending and decrease the magnitude of overspending in the industry, according to Bill McLean, president of IC Insights. McLean also predicts China will emerge as the world’s largest consumer of ICs in 2005, surpassing Japan and North America, to account for more than 20% of global IC consumption.
The semiconductor materials market will continue to grow over the next several years, from $28 billion in 2004 to an estimated $34 billion in 2007, says Dan Tracy, SEMI’s senior director of industry research and statistics. In 2005, SEMI forecasts that the market for packaging materials will grow 8% to more than $11 billion, while wafer fab materials are expected to grow 6% to almost $17 billion. Double-digit growth will be experienced by some materials sectors, including low-k dielectrics, SOI, solder balls, CMP, and laminate substrates. In the period from 2004 to 2007, compound annual growth rates for silicon wafer shipments will be 4.5% globally, and 10% in Asia Pacific, according to Tracy.
Gartner Dataquest is forecasting 5% growth in semiconductor device sales this year, and negative 15% for capital equipment. Klaus-Dieter Rinnen, managing VP of semiconductors for Gartner Dataquest, notes “By the end of Q1 2005, we should be moving out of the current excess inventory situation.” -SCJ