Is Washington Ready to Get Serious About PCBs?

Estimated reading time: 5 minutes

David Schild, executive director of the Printed Circuit Board Association of America (PCBAA), leads an organization focused on the domestic manufacture of PCBs and substrates to support America’s critical microelectronics supply.

In part one of this interview, he reflects on how a “perfect storm” during the COVID-19 pandemic actually ignited the conversation that has allowed PCBAA to flourish: Years of advocacy, the shock of COVID-era supply chain disruptions, and the long road to the CHIPS Act have helped to reshape the federal mindset on industrial policy. How have those years of effort made a difference for electronics manufacturing?

Marcy LaRont: David, how did you initially get involved in PCBAA?

David Schild: I knew some folks at Raytheon (now RTX) and then TTM, who were the founders of PCBAA. It was common sense to me that the critical microelectronics for defense programs should be made here on our shores. Those larger companies that service that industry directly— Summit Interconnect, TTM, Calumet,  Sanmina—had the vision to look forward and say, “We need to have an association. We need to be speaking with one voice in Washington.”

At the same time, the CHIPS and Sciences Act became a major policy push to manufacture semiconductors in the United States. From ideation to execution, it took about 60 months. I think we forget how long it took to achieve, but it has had a significant ripple effect.

LaRont: Most people in our industry don't know how long it took.

Schild: Ten or 15 years ago, it was laughable to believe the U.S. government would directly subsidize the construction of semiconductor factories.

LaRont: In late 2002, I went with the rush to move manufacturing overseas for price competitiveness. The attitude was anti-government intervention, that market capitalism would win out at the end of the day. We still see some of that resistance today. It is very embedded in the American cultural economic experience.

Schild: Interestingly, while America took its foot off the gas of manufacturing, other countries—namely, Taiwan, Japan, the Philippines, Malaysia, and, of course, China—decided that short-term losses for long-term market gains were worth that sacrifice. China is now the leader with 60% of the world’s supply made there.

In June, I told the U.S. China Commission that it’s not a matter of U.S. companies vs. Chinese competitors, but U.S. companies vs. the Chinese government and their policies—whether it is low cost loans, worker subsidized housing, or any other advantage bequeathed by the government for any industry where there is direct competition with U.S. manufacturers. That is a primary message we have been communicating to Congress.

LaRont: When it’s not a fair and even playing field, how do individual companies compete with a comprehensive and fiscally supported national policy?

Schild: It’s tough. Remember that it was a five-year battle to get the CHIPS Act passed, and it went through many iterations. At one point, the bill contained almost $252 billion of direct funding, before shrinking down to $52 billion. There was a lot of fighting over what should and should not be included. This was at the height of the COVID-19 pandemic, where the general population was seeing the effects of dependency on foreign manufacturing, empty shelves at the grocery store, and product shortfalls.

Most famously, people couldn't buy cars and trucks because automotive components were not being shipped to the United States. That clarified the discussion in Washington. Lawmakers realized we needed a domestic capacity. It was the perfect storm that led to the passage of the CHIPS Act.

I am hopeful that it represents the first of many investments by the American government in domestic industry. Right now, for example, there are bills focused on shipping and pharmaceuticals. The trend is going the right way, but we don't have to wind the clocks back very far to see when these ideas seemed pretty radical to our government and many Americans.

LaRont: Considering Chinese policy and the support for the infrastructure of its industry, it will be very difficult for us to legitimately become competitive with China. Does Washington see that? Is there a mindset shift happening?

Schild: Yes, we’ve entered a period of political consensus focused on American manufacturing and on global competition for critical sectors. Whether it's every two or every four years based on elections, the only difference should be in how that policy gets implemented. Certainly, we saw a very different approach under the Biden administration than we're seeing under the Trump administration.

They each have their pros and cons, but on both sides of the aisle you find two things: an understanding that we are engaged in a global competition that’s in our best interest to win, and a recognition on both sides that the government has a role to play. How will it be implemented? Grants, tax break, or maybe more co-investment by industry?

You also have to keep elections in mind. The House and the Senate are up every two years. At least a third of the Senate turns over and the entire House could turn over. We're already starting to think about the next presidential election and who might succeed President Trump. It colors how Washington operates. But look how far we’ve come in the conversation since the CHIPS Act was passed almost five years ago. Industrial policy is now part of the conversation, and that’s a big deal.

LaRont: Yes, that’s true. We have become a part of the conversation pretty consistently on both side of the aisle for nearly five years.

Schild: We need to build factories and train workers up in technical fields here in the United States, to make more of what we depend on in America. It’s no longer a radical idea.

However, I'm very prepared for the laser beam to shift to a new target in Washington, for the attention to go elsewhere. We shouldn't take for granted that Congress cares about the manufacturing segment of the economy right now. The White House is focused on making things here in the U.S., but that could look very different in 24, 36, or 48 months. We must strike while the iron is hot. Speed and urgency should be top of mind.

LaRont: I agree, David. Thank you.

In part two of this interview, David speaks about the process for engaging the House and Senate in critical microelectronics support for companies of all sizes.