While the US CHIPS and Science Act provides $39 billion in domestic chip manufacturing incentives, there is growing industry concern the act does not do enough to support the making of printed circuit boards (PCBs) and integrated circuit substrates.
PCB and IC substrate production is critical to creation of all electronics, but has been overlooked, some believe, by lawmakers and regulators who have given most of their attention to instead fostering domestic chip research and production to address that earlier vital stage in the complex electronics pipeline.
“The CHIPS Act is just the first step. Unless we follow through on a robust ecosystem, the CHIPS Act is all for naught,” said Chris Mitchell, vice president of global government relations at IPC, in an interview with Fierce Electronics. “We should not fool ourselves into being a leader in the chip industry without leading in other parts of electronics.”
IPC is a not-for-profit industry association that represents 3,000 companies in the electronics trade with half of that number based in the US. About 135,000 people work in electronics manufacturing in the US.
The US is well behind China in both PCB and substrate production, he said. “The US has become a leader in designing electronic systems that we can’t build,” he said. “That’s not a strategy for success… As a country, we have to convince people how important this is. China understands it. They understand what a PCB is.”
He also said the inability to produce advanced PCBs leads to a defense vulnerabilility. “The U.S. is increasingly arming its warfighters with inferior military technologies because it cannot domestically produce the most advanced printed circuit boards to accommodate the most cutting-edge semiconductor chips," Mitchell added. "Without greater investment in domestic PCB capabilities, the disparity between U.S. semiconductor leadership and electronics manufacturing vulnerabilities will grow.”
A bill before the US House, HR 3249, calls for $3 billion in added incentives for domestic production of PCBs and substrates, but its prospects are uncertain—especially as Congress is mired in approving an overall government budget for 2024 and faces a lengthy list of thorny issues from border security to aid to Israel and Ukraine.
Introduced in May of 2023 by US Rep. Blake Moore, R-Utah, the bill has garnered several co-sponsors of both parties, including, very recently, US Rep. Ro Khanna, D-Calif., but the measure still sits in a subcommittee of Energy and Commerce.
The bill gives preference to manufacturers with workforce training programs, a key concern to IPC members, Mitchell said. Over a typical year, turnover of production level workers ranges between 20% to 40%, IPC data shows. IPC said there are currently 12,000 open positions in the electronics manufacturing services workforce of 135,000 in the US. The PCB workforce is smaller, with more than 26,000 workers, and faces more than 700 openings.
Mitchell said the current state of the advanced packaging industry in the US cannot meet the expected surge in chips in coming years, especially growth in AI chips. “These things are connected,” he said. ”Electronics interconnection matters. It is a capability marginalized in the US, and unless we invest in that, the US will find itself hard-pressed to manufacture electronics. We have an industry desperate for people. These are good career jobs that don’t require a college degree.”
The House bill with its provision for $3 billion in incentives is “just a fraction of what the CHIPS Act costs,” Mitchell said. But he admitted it faces tough odds, with what he called “chips fatigue” expressed by Republicans on the Hill and concerns over tax incentives expressed by Democrats.
IPC went on record this week in support of a Notice of Funding Opportunity issued by the CHIPS for America R&D Office (under NIST inside of the Commerce Department) to support R&D for domestic advanced packaging substrates and substrate materials. The NOFO would make $300 million available for multiple awards to companies of up to $100 million each for up to five years.
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