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The Government Circuit: Driving Resiliency and Economic Security on Both Sides of the Atlantic

Welcome to the latest edition of 'The Government Circuit', where I share updates on the government policy developments shaping the electronics manufacturing industry. Since the year began, we've already witnessed several significant milestones and strategic engagements that may ultimately affect the way you do business.

U.S. Defense Department Unveils Strategy for Industrial Strength
In a significant move, the U.S. Department of Defense (DoD) unveiled its first-ever National Defense Industrial Strategy (NDIS), outlining a comprehensive vision to guide future engagements, policy development, and investments in the industrial base over the next five years. The strategy, built on four pillars—resilient supply chains, workforce readiness, flexible acquisition, and economic deterrence—highlights key priorities crucial for strengthening the nation’s defense capabilities.

IPC welcomes the NDIS’s emphasis on building resilient supply chains for a variety of trusted electronics components, not just semiconductor chips. In addition, the strategy prioritizes building up a skilled workforce, which aligns with IPC’s agenda.

In an article in Defense One1, Dr. Laura Taylor-Kale, U.S. assistant secretary of defense for industrial base policy, underscored the critical importance of a robust defense industrial ecosystem in deterring potential adversaries and ensuring victory in conflict. We’re pleased to see the NDIS is in sync with IPC’s ongoing advocacy efforts to promote a comprehensive “silicon-to-systems” approach to strengthen the electronics supply chain and workforce.

IPC Invited to White House Event on CHIPS and Related Programs
On Feb. 9, IPC had the privilege of joining key government officials and industry leaders at the White House for an event focused on the CHIPS for America program. The event included the announcement of over $5 billion in expected investments in the CHIPS R&D program, with a substantial portion allocated to workforce development.

As part of the event, IPC President and CEO Dr. John W. Mitchell participated in the formal launch of the National Semiconductor Technology Center (NSTC) Consortium and a roundtable discussion on workforce development. “We can’t solve the workforce problem for slices of the industry,” he said. “Building a ‘semiconductor’ workforce is an inherently flawed notion. We need a robust workforce ‘from silicon to systems.’” Mitchell also emphasized the need for “scale and speed” in workforce initiatives, given that the CHIPS for America program will require hundreds of thousands of skilled workers across all related sectors.

IPC Champions the Full Funding of Defense Electronics Programs
Meanwhile IPC and the Printed Circuit Board Association of America (PCBAA) delivered a joint letter to Congress, signed by executives of 54 member companies. The missive urged full funding in Fiscal Year 2024 for the Defense Production Act Purchases Account and the Industrial Base Analysis and Sustainment program. This action would support the Presidential Determination that PCBs are essential to the defense industrial base. With Congress laboring to complete full-year funding decisions, IPC and PCBAA emphasized that achieving full funding for trusted technologies is vital for continuing investment in the PCB industry, achieving the objectives of the CHIPS and Science Act, and enhancing the U.S.'s global competitiveness.

CHIPS Office Plans $500M Investment in Electronics Ecosystem
In another encouraging development, the U.S. National Institute of Standards and Technology’s CHIPS R&D Office issued two Notices of Intent (NOI) with a combined value of $500 million in areas relevant to the electronics manufacturing ecosystem. IPC applauded the commitment of at least $200 million to establish a “digital twin institute,” aimed at leading the world in transforming semiconductor and advanced packaging manufacturing. An additional $300 million for the National Advanced Packaging Manufacturing Program is another step toward cementing U.S. domestic capacity for advanced packaging substrates and materials, as well as workforce training programs to ensure that new processes and tools are capably staffed. 

Empowering Tomorrow's Workforce with Apprenticeship Standards
In addition to IPC’s advocacy efforts, it is expanding its own workforce development initiatives for the electronics manufacturing industry.

As described in a recent article from “The Job” newsletter by Work Shift, IPC recently gained a seal of approval from the U.S. Department of Labor for its national program standards for electronics manufacturing apprenticeships.

The DOL’s approval of IPC’s standards is a significant milestone for the industry, providing a framework that simplifies the launch of registered apprenticeship programs for companies of all sizes. By facilitating the adoption of apprenticeship programs, IPC seeks to bridge the gap between workforce needs and market demand, ensuring a steady pipeline of talent to support industry growth.

Furthermore, IPC’s partnership with the Institute for American Apprenticeships aims to incentivize employers to initiate apprenticeship programs by offering grants and reimbursement opportunities for technical training. Early adopters such as Zentech Manufacturing have already benefited from these initiatives, paving the way for more small and midsize manufacturers to participate.

IPC’s comprehensive approach to workforce development extends to high schools in three states, where technical instruction is provided to prepare students for the work-based portion of apprenticeships. This pilot program, serving approximately 200 students, exemplifies IPC’s commitment to nurturing talent at an early stage and fostering a skilled workforce for the future.

Ultimately, IPC envisions substantial growth in apprenticeship participation, aiming to equip individuals with the necessary skills to thrive in high-demand roles within the electronics industry.

European Commission Report Illuminates Electronics Sector's Crucial Role
Across the Atlantic, the European Commission recently released its Annual Single Market and Competitiveness Report, shedding light on the key factors driving competitiveness within the European Union.

What we noticed especially was the explicit recognition of the critical role played by the electronics sector in bolstering Europe’s competitiveness and resilience.

At IPC, we are actively engaging with EU policymakers and highlighting crucial issues in areas such as PCBs, EMS capacities, and IC substrates. Here again, a comprehensive, “silicon-to-systems” approach is essential to ensuring that Europe remains prosperous, secure, and globally competitive.

In another move along these lines, the European Commission unveiled a set of initiatives aimed at bolstering economic security in the region, reflecting a proactive response to mounting geopolitical tensions and technological transformations.

Among these initiatives is a proposed revision of the regulation on screening of Foreign Direct Investment, signaling a commitment to safeguarding critical assets and technologies from undue external influence. The EC also issued White Papers on export controls, outbound investment, and dual-use research, and a recommendation on research security. By enhancing research security measures, the EU aims to protect valuable intellectual property and prevent unauthorized access to sensitive technologies.

Emphasizing trade openness and investment while mitigating risks associated with critical technologies, the proposals underscore the EU’s commitment to “de-risking” in an evolving global market.

European Union Advances Green Manufacturing
On another front, the European Council and European Parliament reached a provisional agreement on the draft Net Zero Act. This legislation, reminiscent of the U.S. Inflation Reduction Act, aims to bolster regional manufacturing of green technologies such as solar modules, electricity grids, and wind turbines. The Act sets ambitious targets for the EU, aiming to supply 40% of its own demand for clean tech by 2030. Moreover, it introduces measures to accelerate permitting procedures and incorporate sustainability and resilience criteria into Member State procurement programs.

This initiative underscores the EU’s commitment to climate goals while leveraging the strength of the single market to reinforce Europe’s leadership in industrial green technologies. As 2024 unfolds as a critical year for setting priorities amidst a growing focus on economic security, IPC will continue to emphasize the importance of a “silicon-to-systems” approach to supporting Europe’s electronics manufacturers.

Our Advocacy Depends on You
IPC’s Government Relations team is composed of experienced professionals working for you year-round, but our success depends on active participation from IPC members like you.

We invite you to stay involved in IPC advocacy by browsing IPC’s advocacy web pages, engaging with IPC’s content on LinkedIn and other social media platforms, and reaching out to IPC’s Government Relations team if you have any questions or feedback.

Reference

1.  “Our industrial strength is a deterrent,” by Laura Taylor-Kale, Defense One, Feb. 15, 2024.

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