In 2023, IPC is educating all key audiences about the importance of printed circuit boards, IC substrates, and advanced packaging in the semiconductor supply chain. In this column, we'll discuss the recent efforts made by the United States and Europe to invest in the entire semiconductor supply chain and strengthen the electronics industry. Also, read on for fresh environmental policy updates, as well as ways to get involved in IPC’s advocacy efforts.
Governments Get Serious About Advanced Packaging in 2023
IPC has expanded its efforts over the past year to educate U.S. and European policymakers on the importance of investing in the entire semiconductor supply chain, which includes advanced packaging, IC substrates, and PCBs. IPC is a steadfast advocate for advanced packaging, the need for which IPC laid out in our November 2021 report. To achieve the goals of the CHIPS Act, the USG must invest in the entire electronics manufacturing ecosystem, not just chips.
Fortunately, the U.S. government (USG) has recognized this need—to a degree. In announcing its first funding opportunity under the CHIPS Act, the Commerce Department set a national policy goal establishing multiple high-volume advanced packaging facilities by 2030 and at least two large-scale semiconductor manufacturing clusters, which will be financed by the $52 billion CHIPS and Science Act. These clusters will feature research and development (R&D) facilities, specialized infrastructure, and a robust supplier ecosystem.
On Capitol Hill, U.S. Reps. Anna Eshoo (D-CA) and Blake Moore (R-UT) called on the U.S. Department of Defense (DoD) to use the Defense Production Act (DPA) to increase domestic production of PCBs and IC substrates. With over 50% of PCBs being imported from China, they noted it is critical that the DoD increase domestic production and ensure the use of electronics from trusted sources. Read my full report on USG efforts to help fund the PCB industry alongside the semiconductor industry in I-Connect007.
EU Parliament Addresses Electronics Ecosystem in EU Chips Act
The European Parliament is also taking important steps toward strengthening European leadership in innovation and manufacturing through the European Chips Act. This new legislation aims to build Europe’s supply chain resiliency and security, but here again, a “silicon-to-systems” approach is needed to further strengthen the bloc’s autonomy.
IPC remains committed to working with European institutions and other stakeholders to advance a strong and resilient electronics industry in Europe. We urge the adoption of a final package that includes policy support and funding for related parts of the industrial base.
Latest Economic Data Shows Mixed View of Global Economy
IPC’s February Economic Outlook and Global Sentiment of the Electronics Supply Chain reports provided a mixed view of the global economy. While certain sectors, such as defense, space equipment, and other electronics-related industries are holding up well, the data also showed contraction in some manufacturing sectors in Europe, the United States, and China, along with a decline in EU electronics manufacturing output. However, manufacturers are continuing to hire, and economists have marginally raised economic growth forecasts for 2023.
Meanwhile, our sentiment report showed that profit margins are expected to decline at a significantly higher rate in the Asia-Pacific region as compared to North America. Although the electronics industry is performing well despite expected rising costs, manufacturers expect to see increased costs of labor, materials, and freight over the next six months.
For more insights, please be sure to join IPC Chief Economist Shawn DuBravac on April 4 for a free webinar on the latest economic data, trends, risks, and possible recession scenarios. You can also find more information on IPC's industry intelligence program here.
Understanding PFAS: A Key Issue for Environmental Protection
Per- and polyfluoroalkyl substances (PFAS) continue to gain increasing attention on a state, federal, and global level as more and more policy makers take steps to regulate them due to their long-term persistence in the environment and potential impact on human health. Electronics manufacturing has a particular reliance on PFAS for various applications, including semiconductors, wire and cable insulation, PCBs, and more. IPC encourages members of the electronics industry to examine their supply chains to better understand where PFAS exist, how they are used, what properties they are used for, and whether alternatives exist.
Here in the United States, the U.S. Environmental Protection Agency (EPA) recently proposed a new rule that would block the manufacturing or processing of approximately 330 PFAS listed as “inactive” under the Toxic Substances Control Act (TSCA). The rule, the latest of several measures the EPA is taking to regulate PFAS chemicals, would require companies to file an application before any additional manufacture, import, or processing of listed chemical substances.
EU Commission Seeks Input on Environmental Initiative to Reduce Product Impact
Regulators in Europe have also remained busy with a recently launched call for evidence to determine the first priority products for the Environmental Sustainability Performance Requirements (ESPR) under the EU’s Circular Economy Action Plan. The ESPR aims to improve the sustainability of products throughout their life cycle, while also supporting the EU’s internal market. The EU Commission has proposed a number of end-use and intermediary products, as well as horizontal measures based on an initial impact assessment. A questionnaire on the proposed product priorities is now open, while feedback and comments are due by May 12.
Get Involved with IPC Advocacy
The electronics industry is facing significant challenges in 2023, including supply chain disruptions, rising costs, sustainability pressures, and environmental concerns. However, there are also many opportunities for growth and innovation, particularly in areas such as advanced packaging and PCBs.
Through collaboration and innovation, we believe that the electronics industry can navigate these challenges and continue to drive economic growth and technological advancement. With that in mind, please visit the IPC Online Advocacy Center to tell us about the government policies that impact your business and your industry. It only takes a few minutes and has a real impact.
And be sure to follow us on Twitter and LinkedIn, and subscribe to our weekly Global Advocacy Report. The IPC GR Team is here to help you, so please reach out if we can help advance an issue that you care about.
Chris Mitchell is IPC’s VP of global government affairs. Contact him at ChrisMitchell@ipc.org.