Semiconductor chips received all the attention, and a $50 million subsidy from government. But without the more prosaic Printed Circuit Boards (PCBs) underneath them, chips don’t do anything. The majority of PCB manufacturing has moved offshore, which is why there is a bill in the works to support the industry. This bill will help to ensure that the nation’s supply chain is well-managed. More information is available at the Federal Drive with Tom Temin David Schild, Executive Director of the Printed Circuit Board Association of America, spoke with me in studio
Tom Temin Please give us statistics. These were the first PCBs. They started as a piece made of cardboard with holes. And you’d stick the transistor in and solder the back side. It’s a pretty high tech thing now, Printed Circuit Boards. What is the current value? How much is gone?
David Schild Well, you’re absolutely right that a Printed Circuit Board is an example of high technology, and it’s part of a microelectronics ecosystem that makes really every aspect of modern life possible. From F-35s and F-150s. We’ve got to have semiconductors, but those semiconductors have got to sit on Printed Circuit Boards to make pretty much all of modern life function for us. And you’re right, we’ve had a significant contraction in the size of American industry. 25 years ago, 30% of the market was ours. American-made PCBs accounted for 30%. This was equivalent to 2200 companies. Today, less that 4% of PCBs in America are manufactured by 150 companies. So there’s been a very significant contraction and real offshoring of a critical technology.
Tom Temin The semiconductors must be attached to the board in order to make them useful. This requires sophisticated waves, soldering machinery and pick-and-place, all of which can be numerically controlled. It’s pretty amazing to watch. Are the majority of the people on the boards from abroad? Are boards able to be shipped back? We still do all the soldering and assembly here.
David Schild I think that you’re talking about a global ecosystem that’s going to remain multi-content, multi-country. What we see is an imbalance in the supply chain and a dependence on one area of the world. We saw this during the pandemic. When we export supply chains and have to rely upon foreign sourcing, we sometimes have empty store shelves. Sometimes, we can also have empty dealership parking lots. That’s not what we want. I think the imbalance, the contraction of this industry, it’s not healthy for the economy. And it’s clear that the [Creating Helpful Incentives to Produce Semiconductors (CHIPS)] Act makes an investment into American semiconductors. Instead of making them with American substrates, we should make them up. These should be made with American PCBs, not re-engineered across the ocean.
Tom Temin The semiconductor industry is extremely well-organized. It’s got several national associations that have had a lot of policy impact for many, many years. Jerry Sanders and I used to go to the Semiconductor Industrial Association dinner. We would get chicken fried beef there. What about PCBs. Are they less well-organized? Is this more of a mom-and pop business?
David Schild Two years ago, industry executives realized the need for federal investment and a voice in Washington. The Printed Circuit Board Association of America, or PCBAA was created. We’ve grown to over 27 members today, certainly we need to get bigger and speak with a louder voice in Washington. But I think that we’re really the lead sled dog when it comes to advocating, for this part, of the microelectronics ecosystem. And of course, we’re partnered with organizations like [Institute for Interconnecting and Packaging Electronic Circuits (IPC)] and [U.S. Partnership for Assured Electronics (USPAE)] This is a great effort. Our friends in the semiconductor industry understand that this partnership is important. We must also grow with them as they grow.
Tom Temin And the nature of the PCB industry that is still in the United States, is it the multilayer, really complex type of finely manufactured board or is it just the, well, there’s lower levels that you would might put in a toaster, as opposed to an F-35.
David Schild I think you’d find varying levels of complexity. However, products that end-up in national defense applications need to be made here in America. Our members are proud to fulfill the Defense Department’s requirements. And so, certainly for a lot of aerospace and defense applications, right here in America we’re making state of the art printed circuit boards.
Tom Temin All right. We’re speaking with communications consultant David Schild, who is representing the Printed Circuit Board industry. And you’re also running there association, too, aren’t you?
David Schild That’s exactly right. I’m fortunate enough to be the executive director of PCBA, and excited for what we’ve got lined ahead in Washington.
Tom Temin Well, association heads have special challenges, but this is the world capital for it, so you’re in the right place. Why did the circuit board industry leave America? There’s an environmental impact that they have and that can get expensive and complicated, and the labor costs or what else?
David Schild I think that if you look at what’s happened over the last 25 years, we as a nation have not prioritized American manufacturing, and specifically, high tech manufacturing. Other nations have. Foreign subsidies make it attractive to do business in other countries to build factories and hire workers. But there’s no reason that can’t be done here. As we’ve seen with the CHIPS Act, where public money goes, private money will follow. That $52 billion that you mentioned, that the CHIPS Act brings to the table, it’s been matched by $400 billion from private industry. We believe that a similar investment in PCBs, and we’re asking for a fraction of that money, 3 to $5 billion for capital expenditures for workforce development. Private investment will match that, we believe. A tax credit is the most important aspect of our initiative. An incentive for the manufacturers to buy American PCBs, let’s make it attractive to buy high technology built here in America. We believe that this will help to ensure that the entire ecosystem is healthy and grows domestically.
Tom Temin This was done by a bill that was introduced in the Congress 117th, but not reintroduced here in the Congress 118th. Who’s behind it? What other information do we need about the bill?
David Schild Well, we’re proud that we have bipartisan support for what was known as the supporting American Printed Circuit Boards Act. I’m confident that’s going to be reintroduced soon. And again, we’ve got champions on both the left and the right, the R’s and the D’s. Because I think, it’s a nonpartisan issue to say that we want to have more high technology manufactured here in America. On the heels of the CHIPS Act’s success, I believe the Congress should adopt the rest of this ecosystem and move forward with this and other bills.
Tom Temin They’ve got a lot of priorities. Who are the main sponsors?
David Schild Sure. We’re very lucky to have Representative Blake Moore (R-Utah) and Representative Anna Eshoo (D-Calif.), as the original co-sponsors of this legislation. And we’ve met with a lot of folks on the Hill, and we see a lot of interest and a lot of champions for American high tech manufacturing.
Tom Temin You also mentioned that a PCB must be made in this country for military purposes. You get the idea. [Department of Defense (DoD)] is invested in this particular issue, or do they feel like they’re okay supply chain wise?
David Schild Absolutely. My understanding is that the Department of Defense was one of the first federal agencies to recognize that there are challenges in microelectronics supply chain. And for many years, they have been invested in shoring up domestic capacity and making sure that their supply chains, for the things that our men and women depend on to do their jobs and come home safely, that those things are reliable, that they’re trusted, and that they’re ready when the men and women in uniform need them. The DoD has been very active in this area. They’ve got a number of officials who are focused on this. And honestly, they’ve been great partners with our industry in helping to amplify our message.
Tom Temin The association’s main objective is to convince Congress to reconsider the bill.
David Schild Absolutely. We think that the president’s message from last week, let’s finish the job, applies very well to a discussion about microelectronics manufacturing. We’ve made investment in semiconductors, but chips don’t float. We can’t go anywhere if we’re simply making semiconductors here in America. Let’s finish the job, let’s invest in PCBs and substrates.