It’s Time to Reshore and Restore Printed Circuit Board Manufacturing

Recent wars, ongoing conflicts with peer competitors, and economic conditions have drawn attention to how fragile the global supply chain is. Interruptions to the sources of critical minerals, chemicals and materials are driving up prices and making it harder for American manufacturers to compete. This is especially true for the printed circuit board industry. The printed circuit board, or PCB, is what attaches computer chips to an end-use electronic device. Chips don’t work without PCBs.

The decline of the PCB industry has its origins thirty years ago when U.S. companies began offshoring manufacturing to China and other Asian nations chasing better profit margins. While it was a good short-term strategy to satisfy Wall Street, offshoring decimated the American PCB industry. We once made 30 percent of the world supply and now make barely 4 percent. Not only did the manufacturing disappear, but so did the skilled workforce and intellectual property.

Today secure and trusted PCBs are in big demand for national defense and critical infrastructure systems. Rearming the arsenal of democracy and meeting the mounting demand from the data center industry reveal how dependent we are on other nations for PCBs. While it is fine to have friendly countries provide certain PCBs, we cannot accept sourcing for sensitive industries with Chinese content. Chinese PCBs can be tampered with and have found their way into national defense and critical infrastructure systems.

The loss of manufacturing leadership imperils America’s technology goals. The development of new military systems puts even more pressure on the Defense Industrial Base to produce the most complex PCBs. Drones, hypersonic weapons, fighter jets and bombers all rely on PCBs to give our military the edge needed to prevail in current and future conflicts.

It makes no sense to accept dependency on China whose national priority is to dominate the worldwide microelectronics industry. Other Asian nations are investing heavily in their PCB industries but most of those nations are not qualified to provide the sensitive PCBs for national defense systems. Sadly, the U.S. has not invested the same level.

The U.S. needs legislation and policies that support PCB manufacturing in the way that the CHIPS Act bolstered the semiconductor industry.

There is hope.

In May, through PCBAA-led efforts, Senators Ruben Gallego (D-AZ) and Jim Justice (R-WV) introduced S.4569, the Protecting Circuit Boards and Substrates Act, to incentivize domestic manufacturing of PCBs. The bill provides a 25% tax credit for the purchase or acquisition of American- made PCBs. This bill is a companion to H.R. 3597, the Protecting Circuit Boards and Substrates Act which also calls for the tax credit and a $3 billion grant program for support of American PCB manufacturers. This week the administration invoked the Defense Production Act to ‌address constraints in weapons supply and development ‌for munitions production and supply chains, including critical and capacity-constrained sub-systems needed for weapons production, such as PCBs.

We saw how a public/private partnership like the CHIPS Act drove hundreds of billions in investment for semiconductor manufacturing. For a fraction of the cost of that legislation, Congress can invest in the PCB industry and reduce our dependency on other nations where one political decision or conflict can disrupt supply chains with national security and economic repercussions that could last for years.

A global requirement for PCBs demands a national strategy for manufacturing. Our allies and our adversaries are meeting this challenge head on. The U.S. needs to do the same or we risk ceding the market to those who see the future and have proactively positioned to solve for it.

We urge Congress and the Administration to support American PCB production to build trusted and secure components central to our national and economic security.