The national PCB industry in the USA is facing major challenges

Since the start of the coronavirus pandemic, there have been increasing calls in the USA for the performance of the domestic PCB industry to be increased quickly and significantly. This is the only way it can better meet the demands of the government and the electronics industry for secure supply chains and independence. A look at the NTI 100 tables and the American trade press shows that the government and Congress are moving too slowly.

Among the 146 companies included in the 2021 NTI 100 list, there are five PCB manufacturers from the USA that each had sales of at least $100 million in the past year. These are the companies listed in Table 1. APCT was not yet included in the NTI 100 list for 2020. Amphenol and Sanmina both have production facilities in China and elsewhere. The total sales of the five in 2021 are roughly similar to those of the five European manufacturers, and the growth rate of 8.1% is only about a third as high (23.58%). The USA only accounts for 3.4% of the total turnover of the 146 countries on the NTI 100 list for 2021 (Europe 3%). From 2019 to 2020, there was even negative growth of 3.6%, compared to +10.3% in Europe. The average growth of the 146 countries on the 2021 NTI 100 list was 20.2%, while the global PCB industry grew by 17.6%.

* According to NTI-100 for 2020 ** According to NTI-100 for 2021

One can draw these conclusions: The US PCB industry is not only weakening, it is sick. It has long since lost touch with the Asian PCB market in terms of volume and, in some cases, quality. Sales growth rates are lagging far behind the global average. The process of returning US board production from abroad, particularly from China, to the USA, as called for by former US President Trump and also sought by the new President Biden, has obviously not yet taken place on the desired scale.

Industry association IPC warns

After all, the return requests are primarily based on national security aspects. In recent years, the IPC has repeatedly appealed to the US Congress to do more to strengthen the domestic PCB industry. Just how serious the situation currently is can be seen from the IPC's latest action on this issue. On July 13, 2022, a group of more than 100 top executives representing companies in the US electronics industry sent a strong letter to Congress. They urge him to swiftly address critical shortcomings in the PCB industry and the entire U.S. electronics supply chain.

The letter, organized by IPC, urged all members of the U.S. House of Representatives to support H. R. 7677, the Supporting American Printed Circuit Boards Act of 2022. It would promote the purchase of domestically produced printed circuit boards and encourage industry investment in both existing and new factories, including equipment, employee training, and research and development in the sector.

The letter emphasized that legislation introduced by Representatives Anna Eshoo (D-CA) and Blake Moore (R-UT) is critical to rebuilding a severely depleted but still critical U.S. manufacturing sector. It would relieve an already strained U.S. supply chain and, most importantly, strengthen U.S. national security. PCBs are a critical part of the electronics ecosystem, according to the letter, and are just as important to electronics manufacturing as semiconductors. In fact, electronic systems cannot function without PCBs, and yet the United States relies predominantly on foreign sources of supply and is falling behind in cutting-edge PCB technologies.

"Despite the importance of PCBs to electronic systems, they have been an afterthought for policymakers for decades," said IPC President and CEO John Mitchell. "This bipartisan legislation, if passed, will spur important investment in PCB research and manufacturing in the United States. We are pleased that so many industry leaders agree and join us in urging Congressional support for this legislation."

A recent IPC report found that the United States has lost its historic dominance in PCB manufacturing. Since 2000, the U.S. share of global PCB production has fallen from over 30% to just 4%. China now dominates the sector with almost 60% (according to NTI-100 2021). The report also emphasized that any loss of access to PCB sources outside the country would be "catastrophic" to the United States' ability to manufacture electronics for weapons systems, communications equipment, medical devices, energy systems and more. Clearly, the U.S. government is too focused on the Chips Act for America, which was conceived in 2021 but has still not been passed by the Senate.

Interested parties can find the full letter and signatories at [1]. The signatories of the letter are also listed there. They include subsidiaries of German companies in the USA such as Goepel Electronics and LPKF Laser & Electronics. However, some questions remain unanswered. For example, all of the major US PCB manufacturers listed in the table above have signed the letter, although almost all of them have production facilities in Asian countries and some in China.

Chips Act delayed?

There are also inconsistencies regarding the Chips Act. In a letter dated mid-July 2022, governors and mayors of the two major US parties as well as CEOs call on Congress to act, i.e. to finally pass the major ambitious chip program before chip manufacturers are forced to make their investments in new production facilities outside the USA. Does this mean that the planned construction of the chip factory in Magdeburg by Intel is not as certain as people in Germany think? The statement reads:

"Governors have been encouraged by bipartisan efforts in Congress to pass a compromise bill that supports American innovation and competitiveness. We urge Congress to move quickly to reach agreement on this important legislation. While there are still differences between the House and Senate bills, governors on both sides agree that the $52 billion in federal investment for domestic semiconductor research, development and manufacturing provided in the CHIPS Act is absolutely critical to our national security and will allow us to address gaps and vulnerabilities in the U.S. supply chain" [2].

References

[1] https://emails.ipc.org/Links/
71322ExecLeadershipSupportLetter-PCBAct.pdf
[2] www.evertiq.de/news/28935