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The Government Circuit: Support for Defense Spending Takes Top Priority

For those of us living in the world of politics and policy, the final few weeks before a major election are a little nerve-wracking. Who is going to win? How might the candidates’ campaign promises affect our industry and our strategies over the next few years?

One thing I do know: No matter who wins the White House and control of Congress on Nov. 5, IPC will continue working with members of both major parties to advance policies that boost innovation, investment, and growth and ensure the electronics manufacturing industry’s long-term success. We must.

Here’s a taste of what we are working on this fall, and how we are hoping to set up the new year for success.

Hot Action on Defense Electronics
One of IPC’s top priorities this fall is rallying support for U.S. investments in trusted PCBs for defense applications.

For FY25, the U.S. Senate’s version of the defense spending bill includes $45 million for investment in advanced PCB manufacturing under the Defense Production Act. But the House version includes no such funding. For the final, full-year package, IPC is advocating for the Senate number, which would be one of the biggest wins for the electronics industry in decades.

In early October, IPC persuaded a bipartisan group of six members of Congress, led by Rep. Derrick Van Orden (R-WI), to send a joint letter to House Appropriations leaders in support of the $45 million. Among the signers were co-sponsors of H.R. 3249, the PCBs Act, including the lead sponsor, Rep. Blake Moore (R-UT), and original cosponsor, Rep. Anna Eshoo (D-CA). Earlier this year, Van Orden visited TTM and TCLAD facilities in his district to speak with company leadership and employees. Not surprisingly, he has become a strong supporter for the industry in Congress.

Earlier this year, IPC and PCBAA submitted a letter signed by 49 industry executives urging increases in DPA funding to support the U.S. PCB industry.

Now it’s your turn! Even if you’ve done it before, please raise your voice again now. IPC has made it easy with its “Action Alert Center.” Just follow this link, in just a few clicks, you can help bring this funding over the finish line.

Risks in the AI Supply Chain?
Everyone is familiar with the supply chain risks for semiconductors and the many electronic products and services that depend on them. But is anyone thinking about the supply chain for AI? 

IPC has been thinking about it and an IPC white paper opens a new front in IPC’s campaign for a “silicon-to-systems” approach to supply chain security by exploring the actions needed to improve the supply chain resiliency of U.S.-based artificial intelligence (AI) data centers.

Specifically, the report provides a “SWOT” analysis and recommendations on the infrastructure needed to produce AI-based servers and storage equipment for data centers, and on how to strengthen associated electronics assembly capabilities in the U.S., especially:

• IC-substrate design and fabrication
• AI component assembly and test
• High-bandwidth-memory (HBM) chip assembly manufacturing
• PCB design and HDI fabrication
• PCBA assembly and test

“Several critical areas are identified that require significant government attention and investment to enable a stronger, more resilient domestic supply chain for next-generation AI server data centers from design to manufacture,” said coauthor Devan Iyer, IPC senior director and chief strategist, advanced packaging. The other coauthors were myself and Matt Kelly, IPC chief technology officer and vice president of technology solutions.

The importance of the AI supply chain is already bringing fresh attention to the challenges facing the wider U.S. electronics industrial base. In fact, the issue was raised last month by U.S. Commerce Secretary Gina Raimondo during a meeting of her Advisory Committee on Supply Chain Competitiveness. IPC provided a pre-publication version of this report to the Commerce Department team to inform their work.

As a result, during the recent public meeting, Marti Flacks, the director of the department’s Supply Chain Center, said her team had studied the needs of AI data centers “from top to bottom,” and one of the “top” concerns that emerged is PCBs. “We know that AI data centers need… really high-end, multilayer PCBs, which have very concentrated production in just a few geographies… and are getting less attention than, for example, chips in terms of supply chain risk.”

In keynote remarks, Raimondo said, “And when you get into it, and you realize all the cooling systems, all the circuit boards, all the components come from China, it’s a very uncomfortable feeling.”

The new attention on AI also raises another question: What other sectors of critical infrastructure besides AI and national defense may have risks in their electronics supply chains? The U.S. government defines 16 critical infrastructure sectors where the assets, systems, and networks, whether physical or virtual, are so vital to the United States that their incapacitation or destruction would have a debilitating effect on the nation, including energy, chemicals, financial services, IT and telecommunications, healthcare, food, water, and transportation. In the modern world, reliable, secure electronics are the heart of all these sectors. 

Every industry, government, and nation face these concerns. Solutions must be sought and implemented urgently through collaboration and dialogue. IPC will be in the thick of it. Stay tuned for further developments.

New Guidance on Export Risks
On another front, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has released new guidance designed to help industry and academia prevent export diversions to countries or entities of concern. The guidance informs stakeholders about potential risks beyond those on public screening lists, such as the Entity List. It also introduces a recommended best practice for screening transaction parties using the online resources of the Trade Integrity Project, which identifies third-country suppliers who export Common High Priority List items to Russia. For electronics manufacturing companies, this may mean:

• An urgent need to enhance screening processes
• Adopt additional due diligence measures
• Strengthen training and compliance programs
• Seek closer collaboration with BIS and other industry stakeholders

By implementing these practices, members can better protect their operations, maintain regulatory compliance, and contribute to national security.

European Leaders Focusing on “Tech Sovereignty”
Over in Brussels, the recently reelected European Commission president, Ursula von der Leyen, has announced her proposed Commissioners-designate—akin to cabinet ministers—and a revamped structure for the next five-year mandate through 2029. Especially notable for the electronics industry is the nomination of Finland’s Henna Virkkunen for Executive Vice-President for Technological Sovereignty, Security, and Democracy. This newly created role signals Europe’s growing focus on critical technologies in the upcoming mandate. European Parliament hearings on the nominees are expected in early November. IPC will remain engaged, continuing to advocate for the comprehensive, silicon-to-systems strategy embodied in our Industry Call to Action. 

During last month’s meeting of the EU Competitiveness Council, IPC sent a letter to the Council President and key ministers, urging them to consider the recommendations outlined in our Industry Call to Action. With Europe’s electronics manufacturing sector facing a long-term decline, IPC stressed the need for a coordinated strategy to support electronics for critical industries such as defense and healthcare.

We Welcome Your Questions and Support
Whether we are engaging with policymakers in the Americas, the European Union, or Asia, the IPC Government Relations (GR) Team seeks opportunities to educate, inform and influence policymakers on policies that support our industry.

But our success depends on the active support and participation of attentive people like you! Here are some steps you can take:

• Take IPC’s five-minute survey on the issues and contact your elected officials via the IPC Action Alert Center.
• Peruse our Advocacy pages on IPC.org. If your primary interest is policy in Europe, please visit our European pages on IPC.org and LinkedIn.
• If you are a member of IPC, manage your e-mail preferences and opt in to receive all “Advocacy” updates. If you are not an IPC member—or if you are not sure—please send a note to friends@ipc.org, and our staff will add you to the list. 

As our IPC Government Relations Team continues to advocate for you in the halls of government, please reach out with any questions or feedback.

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