Valley electronics firms are worried about proposed European Union legislation that would ban lead from imported products by 2004. Electronics firms that build circuit boards, semiconductors and other electronic components that require lead as a soldering agent say the industry could be severely affected by the EU’s effort to ban lead. The EU proposal, similar to one now being mulled in Japan, would move up a ban already approved by the European Union Council from 2008 to Jan. 1, 2004. A final decision may come by June. “This is a big issue for us,” said Mark King, marketing director for Diodes, Inc., a manufacturer of semiconductors and electronic components in Westlake Village. Among others, Camarillo-based Vitesse Semiconductor Inc. and Altatron Technologies Inc. of Moorpark have expressed concerns over the issue. Bob Soliva, quality assurance manager for Diodes, said, “Right now we don’t have the means to go fully lead-free, but we believe that in a couple of years we could see a substitute that effectively replaces lead.” However, Soliva said, that lead-free replacement probably will not be available by the 2004 deadline. Diodes, which is just entering the European market this year after solidifying its position in the U.S. and Asia, is cautious about the proposed lead ban. King said Europe now accounts for less than 1 percent of Diodes sales. However, he expects that to be the focus of growth in the future. Crix Molzen, director of manufacturing for Altatron, said its circuit board sales to European customers amount to nearly 5 percent of its $7 million in sales last year. At Vitesse, an estimated 24 percent of its $441 million in revenue last year came from Europe. About 45 percent of Intel Corp.’s Thousand Oaks-based Xircom Inc.’s $496.2 million in sales last year came from Belgium. Xircom manufactures modems and computer adapters. Phil Lichtenberger, executive vice president for Camarillo-based Holl Technologies, Inc., said his company is concerned about the potential lead ban, even though his products do not contain any. Many of Holl’s clients are U.S. firms that do business in Europe. “We make small devices that are attached to PC boards and are soldered, but that’s done by our customers. So how is that going to impact them if they don’t have a lead-free solder? I don’t know, but it will impact us,” he said. Jennifer Guhl, director of international trade policy for the American Electronics Association in Washington, D.C., said the proposed legislation would hurt businesses who have customers in Europe or those that have set up manufacturing operations overseas to compete with European and Japanese firms. “Many of our companies are planning products for 2004 and they don’t know what they can do,” she said. “They’re very concerned about whether this is the tip of the iceberg.” American firms fear a complete halt of sales of their leaded components such as solders, printed wiring boards and other products. Guhl said firms also fear a switch to non-leaded solders could result in increased costs and loss of market share in Europe. The Matsushita Electric Industrial Co., for instance, has been marketing a mini-disk player that uses lead-free solder since 1998. According to a report by New Jersey-based Lucent Technologies last year, U.S. firms could lose $240 billion in the first three years of a ban. The company said that regardless of whether lead is proven hazardous to electronics users studies have yet to prove that a phase-out is inevitable given the momentum behind the ban effort. Guhl said a total phase-out would be costly, given that there are no comparable substitutes for the industry’s standard solder a combination of tin and lead. The American Electronics Association reported that U.S. firms shipped about $16 billion in high tech goods to Japan, $11 billion to the United Kingdom, $9 billion to Germany and $7 billion to the Netherlands in 1999. “We think it’s an ill-advised piece of legislation without any science behind it,” Guhl said. “So the small and medium-sized companies may have a difficult time getting access to lead substitutes, and they’ll be expensive and relatively scarce.” Diodes’ Bob Soliva says there are potential substitutes for lead, but they would drive costs up and possibly force companies out of the market. Some manufacturers, for instance, already use silver, but it is costly and useless at high temperatures. “Tin is a possibility,” Soliva said, “but there is a whiskering effect that could short out your board when the tin spreads out” other components.”