Cashing in One’s Chips

Electronics recyclers should make sure they know the value of what’s in their scrap, Ed Grenchus of IBM Corp., Endicott, N.Y., told attendees of the International Symposium on Electronics & the Environment on Wednesday.

Re-use, disassembly and shredding are all being used to recycle electronic scrap, but which is most cost-effective? Recyclers are engaged in a large-scale experiment to find out.

Grenchus led two different studies—one in 1999 and one earlier this year—to take a look at the revenue returned by re-use, re-sale of certain components or materials recycling during each of these two years.

The IBM study found better returns for raw secondary commodities (shredded or sorted ferrous, nonferrous and plastic scrap harvested from computer scrap) in 1999, when prices for precious metals and other scrap metals were an average of 30 percent higher.

The study, authored by Grenchus and three IBM co-workers, also found that more recent models scrapped in 2002 contain less precious metal content and more plastic. “Newer machines have a greater composition of the machine content being plastic, which continues to have low [market] value. There is [also] a higher percentage of plastic-intensive laptops returned in the 2002 outlook,” according to the study.

The scenario for computer chips and whole computers was a little brighter in 2002, with the looming Y2K worries of the year 2000 working to suppress prices for many pre-owned items in 1999. “As a result of Y2K issues with hardware, many older ‘in service’ machines were scrapped and the associated need for spare parts to support the installed base diminished,” the study determined.

The bad news for recyclers who disassemble is that the shorter life cycle of computers and chips before they are considered obsolete has lessened the overall demand for repair parts. The good news is that when recyclers get hold of a chip or machine that is currently the leading technology, they can fetch a good price for it.

Whereas machines with Pentium III chips could go for between $500 and $1,900 in 1999, those with the current leading chip—the Pentium IV—will fetch from $750 to $2,500 today. Those current prices will only remain in effect until the next advanced chip is introduced, however.

Grenchus’ message to computer asset recovery shops was, “You can’t hold on to this stuff—you have to move it quickly.”

The introduction of used and off-lease laptop machines has been a boon to computer recyclers who recondition and re-sell entire units. The demand for laptops is increasing and used ones are currently selling for roughly twice the amount of used desktop systems. The downside for machine re-sellers is that there is usually no accompanying monitor sale to go along with a laptop purchase.