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American Made Advocacy: Going Beyond the CHIPS Act to Power American Manufacturing

Where have all the factories gone? A tour of America’s former bustling manufacturing communities is a stark reminder that, for the past three decades, we let the microelectronics manufacturing ecosystem disappear overseas, primarily to Asia. For decades, foreign competitors seeking to control critical markets played a long game. Government investment and subsidies were effective in undercutting U.S. and European companies. As other countries created this unfair competitive advantage in manufacturing, the know-how also migrated in their direction. This resulted in the serious workforce challenges the semiconductor and printed circuit board industries face today.

It's no surprise that 30 years of different strategies led to starkly different results. We depend on the rest of the world for the technology stack that enables semiconductors to function. The U.S. contributes just 4% of the world’s supply of PCBs, less than 1% of the substrates, and 3% of the advanced packaging capability.

The implications are profound. First, the long supply chain between the U.S. and Asia is vulnerable to natural disasters, political decisions, and disruptions tied to global chokepoints. As we have seen in the Red Sea, small bands of bad actors can cripple the global supply chain for months.

More and more American companies are examining their global supply chain and seeking to rebalance risk with a more balanced portfolio. Diversifying their footprint across Asia is a first step, but it doesn’t get those microelectronics any closer to the United States. Asia has shipping chokepoints that, if disrupted by natural or manmade disasters, could become factors for microelectronics headed to and from the U.S.

We will continue to play catch up and remain overdependent on a long and vulnerable supply chain for 90% of the printed circuit boards and the rest of the microelectronics ecosystem powering our critical infrastructure and national defense systems if Congress doesn’t address the entire microelectronics ecosystem.

The CHIPS Act claims to have addressed critical disruptions in the semiconductor supply chain. The funding thus far has been for semiconductors but not for the rest of the technology stack. The new fabs being built in the U.S. will begin producing chips in a year or two, but this doesn’t solve the supply chain challenge. We will still ship components back and forth across the globe when we should be investing in the U.S. microelectronics ecosystem.

The one thing the CHIPS Act did well was attract private investors. The same could be done for printed circuit boards and substrates. The Protecting Circuit Board and Substrates Act would do just that. HR 3249 calls for a $3 billion investment in R&D, workforce development, and manufacturing, along with a 25% tax incentive for companies buying PCBs made in America.

Without government investment, we will be perpetually dependent on countries abroad for the technology stack that chips need to function.

We know we will never have 100% of the manufacturing and assembly in the U.S. However, the current situation leaves us vulnerable to forces outside our control, and Congress needs to pass legislation to restore this vital industry. We can’t afford another decade of decline.

The PCBAA believes in, and fights for, market fairness and a level playing field on which U.S. PCB and substrate manufacturers can compete and win. This is the year to join our effort by visiting us at pcbaa.org or contacting me directly.

This column originally appeared in the March 2024 issue of PCB007 Magazine.