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The Government Circuit: Building Industry Resilience in 2023

As the 118th U.S. Congress begins, we at IPC look forward to working with members of both parties to ensure the electronics manufacturing industry’s long-term success by advancing policies that increase innovation, investment, and growth.

As we plan out our advocacy goals for the year, we hope you’ll remain involved with IPC. We’re looking forward to improving on our successes and, with your help, we hope to achieve even more victories for the entire electronics manufacturing industry. Read on for some of the major advocacy highlights from 2022 and a look forward to 2023.

IPC Goes Deep on Advanced Packaging in 2022
Over the past year, IPC expanded its efforts to educate U.S. and European policymakers on the importance of investing in the entire semiconductor supply chain, including in advanced packaging and printed circuit boards (PCBs).

In October, IPC convened a symposium in Washington, D.C., with government and electronics industry leaders that discussed how to strengthen the IC-Substrate and Package Assembly Ecosystem in North America and Europe. An IPC report released in tandem with the symposium found that only 29% of industry leaders think government policymakers understand the importance of advanced packaging in driving innovation, while 84% believe government initiatives to bolster the semiconductor supply chain require significant investment in advanced packaging capabilities¹.

Progress is also being made on the policy-making front, although more work remains. Most notably, the recently enacted CHIPS Plus Science Act included IPC-backed provisions to invest at least $2.5 billion in advanced packaging capabilities in the United States in 2023, and we are continuing to advocate for that objective as the new law is implemented. To build a more robust, domestic ecosystem for advanced electronics, policymakers must:

1. Invest in advanced packaging capacity.
2. Invest in research and development.
3. Promote supply chain partnerships instead of supplier relationships.
4. Make strategic decisions on what we are building and for whom.

Looking ahead to the rest of 2023, IPC will continue to advocate for the entire semiconductor supply chain in every policy-making arena. If you’re interested in supporting our efforts, please visit the IPC blog for more information or contact me at chrismitchell@ipc.org². 

Volatility and Uncertainty Expected in 2023
COVID-19, Russia’s invasion of Ukraine, soaring global inflation rates, and recession fears inhibited global economic growth and contributed to the cloud of uncertainty in 2022.

According to IPC’s December Global Sentiment Survey and Monthly Economic Outlook Report, volatility and uncertainty will continue to influence the narrative in the early months of the new year^3-4. IPC Chief Economist Shaun DuBravac predicted that about a third of the world economy will be in recession in 2023 as global economic growth is expected to slow further, clocking in at less than 2%.

Despite a deteriorating economic outlook, industry demand is holding up, though high costs are continuing to create challenging conditions for electronics manufacturers. The latest report shows that 76% of electronics manufacturers are experiencing rising material costs, while 73% indicate that labor costs are on the rise. Meanwhile, ease of recruitment and profit margins are declining. You can read IPC’s full report online; please reach out if you have any questions.

Dynamic Environmental Policy Landscape Expected in 2023
Environmental regulations continue to be a top-of-mind concern for our members, and the EU and U.S. regulatory agendas are crowded with chemical and product policies that will affect electronics manufacturers in 2023.

Most recently, IPC highlighted the costs and impacts of reporting and recordkeeping requirements for per- and polyfluoroalkyl substances (PFAS) under the Toxic Substance Control Act (TSCA) in its December comments to the U.S. Environmental Protection Agency (EPA)⁵. IPC also cited complexities in electronics supply chains that would make proposed reporting and recordkeeping difficult. The EPA’s Initial Regulatory Flexibility Analysis (IRFA) focused on cost estimates for the proposed rule, especially its effect on small businesses⁶. We expect PFAS to continue to be a hot topic in 2023.

Over in Europe, the European Commission recently released a final version of a working document on prohibiting products on the EU market that are made with forced labor⁷. The working document, which provides evidence and justification for the proposed policy, is linked to the forced labor initiative proposed in September 2022. The proposal is in line with the EU’s efforts on due diligence, and we expect further discussions and decisions by policymakers in 2023. Read IPC’s recent blog for more on the goals and timeline of the initiative⁸.

Let IPC Environmental Regulatory Affairs Manager Suhani Chitalia know if you have any questions and if there is any way we can assist you with upcoming regulations. Our environmental advocacy team will be busy monitoring and engaging on these topics and more for you in 2023.

How Can Government Help or Hurt You in 2023?
As a member of the electronics manufacturing industry, it’s important for you to stay informed about the government policies that impact your business and your industry. With that in mind, we want to know: which government policies worry you most? How can government help or hurt your company in the next few years?

IPC is conducting a survey to gather information on the top concerns of electronics manufacturing industry members and how government policies can either help or hurt their companies in the next few years⁹. The survey, which will help shape IPC’s advocacy efforts in 2023, will only take a few minutes to complete and is a great opportunity for industry members to voice their concerns and help shape future policies. Read a new IPC blog for more on our 2022 advocacy efforts and how you can get involved in 2023¹⁰.

Please let me know if you have any questions or suggestions for IPC advocacy this year. With your help, we can begin the new year in a strong position to advance our advocacy goals.

References

1. “Towards a Robust Advanced Packaging Ecosystem,” with a forward by John Mitchell, IPC.org, 2022.
2. “IPC Goes Deep on Advanced Packaging in 2022,” by Chris Mitchell, IPC.org, Dec. 16, 2022.
3. “The Current Sentiment of the Global Electronics Manufacturing Supply Chain: Monitoring the Pulse of the Global Electronics Industry,” IPC.org, Oct. 2022.
4. “IPC: Economic Outlook,” by Shawn Dubravac, IPC.org, Dec. 2022.
5. Joint letter from IPC and the Information Technology Industry on “Reporting and Recordkeeping Requirements for Perfluoroalkyl and Polyfluoroalkyl Substances,” addressed to the EPA’s Office of Pollution Prevention and Toxics, dated Dec. 27, 2022.
6. “EPA Releases Initial Regulatory Flexibility Analysis on Proposed PFAS Reporting Rule for Public Comment,” EPA.gov, Nov. 25, 2022.
7. “Final Version: Effectively banning products produced, extracted or harvested with forced labour,” EU Initiative, ec.europa.eu, Dec. 16, 2022.
8. “European Commission Publishes Proposal on Prohibiting Products Made with Forced Labour,” by Suhani Chitalia, IPC.org, Oct. 7, 2022.
9. “IPC Survey: How Can Government Help or Hurt You in 2023?” IPC.org, 2023.
10. “How Can Government Help or Hurt You in 2023?: IPC Invites You to Speak Up,” IPC.org, Jan. 12, 2023.

Chris Mitchell is IPC’s VP of global government affairs. Contact him at ChrisMitchell@ipc.org.