American Made Advocacy: The Three Essential Ingredients of Reshoring

Woven into almost every economic story these days is “reshoring,” a word most Americans had never heard just 18 months ago.

For decades, market pressures and foreign subsidies drove manufacturing of everything from socks to semiconductors overseas. Policymakers and economists called this “offshoring.” This shift was the natural consequence of an increasingly interconnected world, new trade agreements, and a period of unprecedented global peace and security.

Consumers reaped the benefits of offshoring in the form of inexpensive goods. But as the COVID-19 pandemic made clear, we paid a price for sending the production of critical technologies overseas. Disruptions to unpredictable supply chains and dependence on technology in far-off locations led to sudden price surges and empty store shelves. This should be a real wake up call for both government and industry. Chasing the low-cost option without considering the broader long-term implications brought us to where we are today.

The effects of offshoring have been especially dramatic for the PCB industry. Two decades ago, nearly 30% of the world’s printed circuit boards were made in America. Today that number is just 4%. The number of PCB companies fell from 2,000 to fewer than 150. And while the loss of manufacturing is alarming, we have also lost intellectual property, capital assets, and the accumulated knowledge of thousands of U.S. employees.

The good news is that policymakers have acted to reshore select microelectronics by passing the CHIPS and Science Act, which will invest more than $50 billion through grants and tax credits into building new facilities in the United States.

Now we need to take the next step. Making chips in America doesn’t solve the supply chain security and resiliency issues. Why not? Because when the new chips are made here, they will still rely on PCBs and advanced packaging done almost exclusively in Asia.

How can we restore domestic production of microelectronics? Here are three places where government and industry need to act:

Innovation
Just as chips have evolved, PCBs have become highly complex microelectronics constructed with custom combinations of woven glass, copper foil, resin, and other highly engineered materials. PCBs are modern marvels, but as semiconductors evolve, so must the PCBs that support them. PCB manufacturers must invest in R&D to stay current. This past year, Congress started to address R&D for PCBs through HR 7677, the Supporting American Printed Circuit Boards Act, a bill that will re-emerge in the 118th Congress. Government support for R&D is important because the U.S. competes against countries that have been incentivizing innovation and low-cost production for decades. It is time for the U.S. to step up and do the same.

Talent
The men and women who design, build, test, and inspect PCBs are the most impressive people I’ve had the pleasure to work with. Unfortunately, their ranks have thinned as the industry contracted over the past two decades. When manufacturing and R&D migrated overseas, so did much of the know-how. As a nation, we need to invest in the manufacturing and scientific skills we need to be competitive. This is a long-term issue. If we don’t address the shortage of qualified workers now and provide them with clear career pathways, we will have a hard time attracting the next generation to this industry. The talent pipeline is just as crucial as any piece of machinery we might buy or any building we might erect.

Investment
Government incentives alone are not enough to scale up and sustain a robust and resilient microelectronics industry in the U.S. The present business case is challenging. To attract commercial investment, prospective investors need to see both the right conditions and a promise of future returns. Future returns depend on projecting aggregate demand. For example, if we were to put together the domestic demand for 5G, medical, finance/banking and telecommunications, and other critical infrastructure, I believe we would see a viable investment opportunity. Government and industry should agree on the critical infrastructure that requires domestically produced PCBs and other microelectronics. Then legislators and regulators could take coordinated action to support this industry and protect our nation’s critical infrastructure.

Reshoring microelectronics manufacturing has a multitude of benefits, all of which make a compelling argument for government and industry action. As the Printed Circuit Board Association of America, our efforts in Washington, D.C., haven't gone unnoticed. We continue to educate, advocate and lobby for more government cooperation. Join us today as we work toward a stronger future for this critical industry.

This column originally appeared in the December 2022 issue of PCB007 Magazine.

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2023

American Made Advocacy: The Three Essential Ingredients of Reshoring

01-10-2023

Woven into almost every economic story these days is “reshoring,” a word most Americans had never heard just 18 months ago. For decades, market pressures and foreign subsidies drove manufacturing of everything from socks to semiconductors overseas. Policymakers and economists called this “offshoring.” This shift was the natural consequence of an increasingly interconnected world, new trade agreements, and a period of unprecedented global peace and security. Consumers reaped the benefits of offshoring in the form of inexpensive goods. But, as the COVID-19 pandemic made clear, we paid a price for sending the production of critical technologies overseas.

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Back

2022

American Made Advocacy: Congress Must Redefine What’s Critical

12-02-2022

Regardless of what emerges from the 2022 mid-term elections, we know that on Jan. 3, 2023, the 118th Congress will be seated and begin their work. The ongoing effort to build secure and resilient supply chains will be front and center on their agenda. On the heels of everything that has been done to invest in semiconductor reshoring, some might ask why further action is needed.

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American Made Advocacy: The CHIPS Act is Just the Beginning

11-07-2022

Now that the much-heralded CHIPS and Science Act has been signed into law, the work to secure the entire microelectronics ecosystem must begin. We have a long way to go in restoring balance and resilience in our critical supply chains. Over the past 20 years we have let the manufacturing and the know-how that goes with it migrate overseas. U.S. dependance on foreign suppliers won’t be reversed overnight, even by building semiconductor fabrication plants here.

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American Made Advocacy: DoD Unarmed Without the PCB

05-17-2022

It’s been more than 800 days since the global COVID-19 pandemic upended the supply chains of almost every industry. Whether it’s a shortage of commercial and consumer electronics or automobiles, businesses and their customers are bearing the brunt of what decades of offshoring and billions in foreign manufacturing subsidies have caused. One sector that sometimes escapes the attention of everyday Americans is aerospace and defense, where high-tech platforms and equipment are essential to mission success.

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American Made Advocacy: What Happens in Washington Happens to Us All

03-22-2022

Like many of you, I’ve spent the last few years grappling with the challenges posed by a global pandemic. Whether it’s staffing a production line or obtaining key materials, PCB manufacturers and their suppliers have had to adapt quickly to a radically changed environment. We’re more than 700 days into this new world, but as an industry, we cannot allow our day-to-day focus on operations to distract us from what is happening in Washington and what it means to the microelectronics ecosystem.

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American Made Advocacy: A Voice in Washington for American-Made PCBs

01-24-2022

I-Connect007 welcomes new columnist Travis Kelly, president of Isola Group and now chairman of the newly formed Printed Circuit Board Association of America (PCBAA). This organization was formed to address to the U.S. Congress the critical supply chain issues facing the printed circuit board and semiconductor industries. It has three major objectives: To support domestic production of PCBs, enhance domestic supply chain security, and advocate for initiatives that create fair market conditions. Kelly is currently leading PCBAA, comprised of several domestic PCB fabricators with a vested interest in lobbying Congress on these important issues.

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