New EU environment directives estimated to cloud NT$200 billion Taiwanese hi-tech exports

Taipei, Jan. 17, 2005 (CENS)--The two new European Union (EU) environmental-protection directives are estimated to impact around NT$200 billion (US$6.2 billion at US$1:NT$32) worth of Taiwan-made electronics products when they are put into force in July 2006.

The Taiwan government-backed Industrial Technology Research Institute (ITRI) recently completed a study addressing potential impacts from Waste Electrical and Electronic Equipment (WEEE) directive and Restriction of Hazardous Substance Directive (RoHS) on Taiwan-made electronics products.

The institute's research estimated that the two directives would put a damper on 44 items of Taiwan-made electronics products valued about NT$200 billion a year by increasing the Taiwanese manufacturers' spending on reclamations and environmental-friendly materials as well as components.

The study estimated the two directives to increase the Taiwanese manufacturers' reclamation cost by 3% to 5% and their spending on new materials by 5% to 10%.

The two directives request all imported electronics and electrical products to meet the rule that the products must be 55% to 75% recyclable in materials, components and processes. Otherwise, they are not allowed into European Union.

At a conference recently held by Imports and Exports Association of Taipei, Administrator Chang Juu-en of the Cabinet-level Environment Protection Administration said the Executive Yuan, Taiwan's Cabinet, heeded the issue very much and had instructed related government organizations including his administration to work out countermeasures.

Taiwan Electrical and Electronic Manufacturers' Association (TEEMA), which represents the majority of the island's manufacturers of electronics and electrical products, pointed out that most of the island's big manufacturers had been well prepared for the directives whereas its small and medium-size manufacturers had not. The association added that the small and medium-size manufacturers accounted for around one third of Taiwan's 2003 exports of electronics products, which valued at about NT$1 trillion (US$31.2 billion).

Among the big Taiwanese manufacturers are chip assemblers Advanced Semiconductor Engineering (ASE) Inc., Orient Semiconductor Electronics, Ltd. Greatek Electronics Inc. and Siliconware Precision Industry Co., Ltd. These companies have offered packaging services based on lead-free processes. ASE landed RoHS-compatible orders from U.S. chip designer Xilinix in late 2003.

Both TEEMA and Taiwan Semiconductor Industry Association (TSIA) have set up task forces to help domestic manufacturers establish green supply chains to meet the trend.