Hardware vendors could soon find themselves under pressure from the US government over their use of materials harvested from war-torn regions under controversial circumstances.
Research firm IHS said that as many as 90 percent of firms which manufacture electronics components are unable to show that their supply chains and industrial manufacturing operations are free of "conflict" minerals whose collection and production has been linked to human rights abuses.
The company said that materials such as tungsten, gold, tin and tantalum are considered vital for the manufacturing of components, but are commonly harvested in war-torn areas which have a history of mining under inhumane conditions and have been linked to rights abuses.
The materials are vital components in chips and other hardware components used in both consumer and enterprise electronics. Analysts estimate that the conflict materials account for hundreds of millions of dollars in revenues every year.
Further complicating matters for vendors is a recently-passed US law which will require vendors to disclose the sources of their raw materials and deliver reports and guidelines on their plans for phasing ot and preventing the use of conflict materials in their products.
With just 11 percent of firms believed to be in compliance with the regulations, analysts wonder if major vendors could find themselves running afoul of the government in one of the world's largest electronics markets.
"Large electronic original equipment manufacturers (OEM) use tens of thousands of parts that must be examined to determine their conflict mineral content," said IHS supply chain product marketing director Rory King.
"The next 19 months really is not very much time to communicate, collect, analyse, and prepare information on mineral sources across a globally diverse, multi-tier value chain, in order to determine conflict minerals content and develop reports that comply with the SEC rule."
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