The bipartisan CHIPS and Science Act of 2022 ushers in a new era of leadership for U.S. semiconductor manufacturing and related industries. However, rebuilding America’s advanced electronics industry will take a sustained, long-term effort, and it’s not just about chips.
Chips do not float in the air; they must be interconnected with other hardware and software elements for electronic systems to work. And today’s more advanced chips require more advanced printed circuit boards (PCBs) and PCB assemblies. But alarmingly, the PCB industry has parched on the brink of extinction in the USA. Increasing domestic chip production without strengthening the PCB industry will not improve the overall supply chain, as chips made in Arizona, California, or Ohio will still have to be sent overseas to be packaged and assembled into products. finished, leaving the country vulnerable to supply chain disruptions.
The United States not only seeks to manufacture the best electronic components; he tries to build the biggest electronic systems. This requires understanding the supply chain from “silicon to systems” and filling in the gaps. The United States must abandon its de facto policy of viewing certain segments of the electronics industry – especially PCBs – as consumables.
HR 7677, the Support US circuit board lawwill begin to fill this troubling gap in the US supply chain.
- Specifically, the bill provides a 25% tax credit for the purchase and acquisition of U.S.-made PCBs and establishes a financial system program, modeled after the CHIPS for America Act, for facilities American manufacturing or researching PCBs.
- This bill would stimulate domestic PCB manufacturing by encouraging purchases of domestically produced PCBs.
- It would also boost industry investment in plant, equipment, workforce training, and research and development.
- There are many small and medium-sized businesses (SMBs) across America that will benefit from HR 7677, and they will help achieve the goals of the CHIPS Act. SMEs will lead the manufacturing renaissance.
What the U.S. government must do:
- Enact the Supporting American Printed Circuit Boards Act (HR 7677), which would encourage purchases of domestically produced PCBs and investment in plant, equipment, labor training, and R&D.
- Ensure that, upon implementation of the CHIPS Act, the $2.5 billion funding for “advanced packaging” is fully leveraged to upgrade and grow the US PCB and EMS sectors.
- Issue a Presidential Decision on PCBs and IC Substrates, in accordance with Section 303 of the Defense Production Act, to address the vulnerability of the industrial base to safeguard the country’s defense and technological leadership.
- Develop new public-private R&D opportunities, including a National Interconnect Manufacturing Institute.
- Identify electronics manufacturing as a vital U.S. government economic and security priority and pursue a strategy to revitalize all segments of the industry.
U.S. government and industry reports confirm this
In February 2022, the U.S. Departments of Commerce and Homeland Security issued a Assessing Critical Supply Chains Supporting the US Information and Communications Technology Industry, including this key finding: “Current State of ICT Manufacturing and Related Challenges: The United States continues to lead ICT development and innovation in many product categories. However, the production of many products such as printed circuit boards (PCBs) and displays has become increasingly concentrated in China, along with electronic assemblies.
The report urges greater federal support for the national PCB industry:
- “Revitalize the ICT manufacturing base in the United States: Support domestic investment and production of key ICT products, potentially including printed circuit boards (PCBs) and semiconductors, through appropriate federal incentives in procurement and funding programs such as Title III of the Defense Production Act and the [CHIPS for America Act].”
- “Building Resilience through Secure and Transparent Supply Chains: Promoting supply chain risk management practices through procurement and oversight efforts, such as implementing a assured supplier program for PCBs for the federal government and the establishment of a critical supply chain resilience program at the Department of Commerce. »
- “Continue to study the ICT industrial base: Conduct further industrial baseline studies on critical ICT products such as PCBs and related microelectronics…to guide long-term policy planning.”
A recent report by IPC found that since 2000, the country’s share of global PCB production has fallen from over 30% to just 4%, with China now accounting for around 50%. Only four of the top 20 Electronic Manufacturing Services (EMS) companies are based in the United States, and any loss of access to non-domestic sources of PCBs would be catastrophic. The reports of the United States Department of Commerce in 2018 and 2022 confirm these risks.