Even as the US semiconductor industry celebrates the benefits of the US CHIPS Act in creating hundreds of billions of government and private investment in new fabs, another major segment of the electronics industry is arguing for a greater focus on creating a more resilient domestic supply chain for substrate design and fabrication and associated electronics assembly capabilities.
The IPC trade association made up of 3,000 member companies is lobbying Congress and US Commerce and Defense Department officials for increased government attention and investment to build up a supply chain that can support massive growth in AI-based data centers and their storage equipment. (IPC, formed in 1957 as the Institute of Printed Circuits, is also known as the Association Connecting Electronics Industries.)
The group’s focus has been on strengthening electronics assembly in the US to fill gaps in multiple areas: IC-substrate design and fabrication, AI component assembly and test, high bandwidth memory (HBM) chip assembly manufacturing, printed computer board (PCB) design and high density interconnect (HDI) fabrication and PCB assembly and test.
All these focus areas are “critical…to enable a stronger, more resilient domestic supply chain for next-generation AI server and data center from design to manufacture,” said Devan Iyer, IPC chief strategist for advanced packaging. He coauthored a white paper available for download that further describes the issue.
Gaining US government attention on the focus areas has been been hard to muster, according to IPC. “The PCB and EMS [Electronics Manufacturing Services] industry have been raising these concerns for years, so the pace of government response is frustratingly slow,” said Chris Mitchell, IPC vice president of global government relations. Commerce Secretary Raimondo understands the issues IPC has raised, he added. “But catalyzing government to address these issues takes time.”
One bright moment occurred in August when the Senate Appropriations committed voted unanimously for a defense funding bill that would for the first time allocate Defense Production Act funding for PCB manufacturing. In the past, such appropriations had been lumped together with “microelectronics” which historically has been focused on semiconductors. The committee also added clarifying language to recommend continued future investments in PCB manufacturing.
“We are increasingly confident that we have moved beyond persuading government that electronics manufacturing is important and shifted to the more important discussion about how to revitalize the industry in the US,” Mitchell told Fierce Electronics.
As with any funding measure in Congress, there are multiple steps to reach full approval. The defense appropriation approved by the Senate committee in August is connected to the larger politics of overall government funding and Congress is currently operating on a short-term Continuing Resolution to fund the government through Dec. 20. It isn’t clear if Congress will fund the government through all of FY 25 or enact another short-term bill in February. “Either way, yes, the funding is at risk,” said Rich Cappetto, IPC’s senior director of government relations.
IPC is advocating for the House to include PCB funding in the final appropriations package. “It would be an immense lost opportunity if Congress let the funding fall out,” Cappetto added. “The US is more than a decade behind in technology and vastly outmatched in capacity. Delaying investment will only cause the industry to fall further behind.”
Some measures have been taken, including a Department of Defense Award of $30 million to TTM Technologies in Santa Ana, California in October. The funds were facilitated by the Defense Production Act purchasing office. They will allow TTM to acquire and install advanced manufacturing equipment and develop prototype designs for PCBs used at a Syracuse, NY, facility.