Supplier Requirements for Toxic Material Restrictions and Electronics Waste Laws

1. Supplier Requirements for Toxic Material Restrictions and Electronics Waste Laws Update Mar, 2007

2. What Is This Session All About? • Update you on an important environmental trend affecting our industry. • What Speedline is doing about it, and why • Explain what we need from you These environmental norms will become a regular part of the way we and you do business Company Confidential

3. An Important Trend – Environmental Laws Aimed at Products Spearheaded by the EU Chemicals (REACH) ? Restriction on Hazardous Substances Packaging Sustainable Manufacturing End of Life Vehicle Integrated Product Policy Waste Electrical and Electronic Equipment Energy-using Products Batteries ? 1990s2003 2005 2006 2008-2012 2015-2020 Company Confidential

4. Other ‘Copycat’ WEEE and RoHS Laws • US States – many substance bans, such as mercury in MA, Cadmium in VT • California – pending bill to copy EU RoHS almost exactly • Japan – labeling requirements • Korea – pending bill on RoHS and WEEE recycling Company Confidential

5. China RoHS • Phase I: Labels & Tables: • Went into effect March 1st, 2007 • Covers more than 1,800 products including many currently out of EU Scope. • Requires all Electronic products to be labeled as compliant or non-compliant. • Non-Compliant products must show Environmentally Friendly Use Period (EFUP) • All shipments must also include BOM Table showing Substance type compliance at sub-assembly level. Complaint Product (Contains No Materials that Exceed MCV) Non-Complaint Product. At Least One Material Exceeds MCV. Number show EFUP Company Confidential

6. China RoHS • Phase II: Pre-Market Testing & Certification • Catalog of covered products not yet released. • Catalog will be a sub-set of the 1,800+ Products covered in Phase I • Additional products will be added periodically. • Will require pre-market testing by an approved native lab. • There are not expected to be any product exceptions. Company Confidential

7. How Do RoHS Laws Affect Speedline? • Speedline products are “large-scale industrial tools” – currently out of scope in the EU, but • Indirect effects already sweeping the entire industry along • Non-Lead-free parts are being phased out • Contract Manufacturers are moving to Lead-free assembly • China RoHS may not have this exemption, and • Our competitors are claiming “compliance”,plus • Our customers are demanding conformance - large companies are adopting uniform compliance requirements – exempt or not Therefore, we have initiated a vigorous program to make Speedline products RoHS-compliant Company Confidential

8. RoHS Effectively prohibits toxic substances (i.e. the RoHS 6): Cadmium Mercury Lead Hexavalent Chromium Polybrominated Biphenyls (PBB) Polybrominated Diphenyl Ethers (PBDE) from most types of electrical and electronic equipment (EEE) What Do These Laws Require? Company Confidential

9. Maximum Concentration Values (MCV’s) • Lead • Hexavalent Chromium • Mercury • PBB’s and PBDE’s • Cadmium 1000 Parts-Per-Million or, 0.1% 100 Parts-Per-Million or, 0.01% Company Confidential

10. Silicon chip Bond wire (Au) Lead-frame (Cu) Lead-frame plating (Cr) Plastic encapsulation Die attach adhesive (silver epoxy or high lead solder) Solder bump (Sn-Pb) Adapted from Paul Goodman, ERA MCV’s Are Applied to Every Homogeneous Material Company Confidential

11. Chromate plating Lubricant Base metal alloy Passivation coating MCV’s Are Applied to Every Homogeneous Material – Including Non-electronic Parts Company Confidential

12. PPM of Component Vs. PPM of Material Sn-Pb solder alloy (a material) solder bumps on lead-frame (15% Pb) • 90 ppm by weight of component • 150,000 ppm by weight of material • Does NOT comply Company Confidential

13. PPM of Component Vs. PPM of Material • Total mass: 9.8g • Yellow chromate plating: .8mg (8 ten-thousandths of a gram) • 82 ppm by weight of part • Almost 100% of plating material • DOES NOT COMPLY Company Confidential

14. What We Need From Our Suppliers • To start – Certificate of Compliance • Confirmation that no RoHS substances exist above limits. • Spreadsheet with parts under review will be provided to you by your buyer. • Spreadsheet must be updated for all parts shown on spreadsheet. • Yes/No Compliance Response. • Will include current EU Exemptions • Authorized signature Company Confidential

15. What We Need From Our Suppliers • For non-compliant parts Speedline follows-up with more detailed survey requesting RoHS substance compositional data e.g.: • Which subpart has a RoHS Material? • In what proportion? • Is there a substitute? Company Confidential

16. Supplier Conformance Process (1) Product Priority List Supplier Communication Tools Initial Certificate of Compliance Data Obtained? Ensure All Documentation Updates Are Made Via System Tools Yes No Risk Assessment: Ensure Supplier CoC is Acceptable To sheet 2 Company Confidential

17. Supplier Conformance Process (2) From sheet 1 CoC Acceptable? Work With Suppliers to Obtain Level 5 Documentation by Item Yes No Report – compliance met Yes Level 5 Docs confirm material compliance? Ensure All Documentation Updates Are Made Via System Tools Yes No Work With Suppliers to Obtain Level 5 Documentation by Item Engineer out, replace, or change item Company Confidential

18. Certificate of Conformance • A legal statement that: • Claimed RoHS conformance status is true to best of your knowledge • You have the authority to say so on behalf of your company • Claimed RoHS conformance is based on verifiable technique, or on the basis of similar CoC’s from your own suppliers Company Confidential

19. Make-to-print/ Make-to-spec Suppliers • Speedline functional specs are being revised to incorporate RoHS compliance for materials, plating, finishing, etc. • Applies to newly released parts • Existing Parts will be updated as required. • Make to print suppliers are not exempt from providing RoHS compliance information. Company Confidential

20. Certificate of Conformance Form Form is consistent with IPC 1752 Class 1 Company Confidential

21. IPC 1752 Form – Page 1 Company Confidential

22. IPC 1752 Form – Page 2 Export data to XML file – smaller and easier to email Company Confidential

23. For Non-compliant Parts and Materials • We’ll ask for more detailed substance information: • Where is the non-conforming material? • What is the non-conforming material concentration? • Is a substitute material possible? (e.g., plating with Tri-chrome instead of Hex-chrome) • More detailed Material Declaration Form (IPC 1752 Class 5) • We’ll work with you to find a compliant alternative Company Confidential

24. Non-compliant Level 5 Report Company Confidential

25. FAQ’s • Q -I don’t supply electronic parts, do I need to complete? • A – YES! RoHS covered materials can be in any type of material, not just electronic parts. In fact, fabricated parts constitute one of the highest risk areas. • Q- I supply what Speedline specifies, why do I need to complete? • A – As the supplier of the part, you are in the best position to provide up-to-date, accurate information regarding the compliance of the part. Company Confidential

26. FAQ’s • Q- How would I know if there are any RoHS covered materials in the parts I supply to Speedline? • A- If you are not able to determine if any of these materials exist and at what concentrations, your best source of information will be your supplier. In some cases, you may need to work with your direct supplier and require them to make the same request to their supplier. RoHS is very widespread, so it is unlikely that the required information will not be available at some level. Company Confidential

27. FAQ’s • Q- If I am supplying Non-compliant materials, should I begin substituting compliant materials. • A- You should continue to supply as specified. Based on our internal risk assessment we will determine if an engineering change is required. If so, we will initiate an engineering change and work with you on the implementation of the change. If a part will no longer be available due to RoHS changes, please notify your Buyer immediately. Company Confidential

28. Questions, Comments, Discussion Company Confidential