What is an “industrial base” to the U.S. Defense Department? And wouldn’t we expect a “battle plan” from Defense, not an “industrial strategy"? Here, I’ll review the Defense Industrial Strategy from the January 2021 Report to Congress from the Acquisition and Sustainment section of the Department of Defense.
This is essentially an annual self-analysis or report card to the Armed Services Committees of the Senate and the House. It involved the Office of Industrial Policy with special input called out from the JIBWG (Joint Industrial Base Working Group). This will, for sure, be the topic of a future Defense Speak Interpreted column.
In the forward, the report states, “Today, however, that base faces problems that necessitate continued and accelerated national focus over the coming decade.” The four needed activities include:
- Reshore our defense industrial base and supply chains to the United States and to allies, starting with microelectronics, and restore our shipbuilding base.
- Build a modern manufacturing and engineering workforce and research and development (R&D) base.
- Continue to modernize the defense acquisition process to fit 21st century realities.
- Find new ways to partner private sector innovation with public sector resources and demand.
The cover says it cost “only” $159,000 to produce—truly a bargain in the Defense Speak world of billions of dollars. The report is 184 pages long (less than $1,000 a page to produce?). The stated goals are to:
It contains 16 working sections ranging from space and missiles on down to materials and workforce.
The most important section for us starts on Page 65, the review of the electronics supply chain. Section topics concerning “assessment” within electronics include:
- Decline of Domestic Semiconductor Manufacturing
- Counterfeited Electronic Components
- Decline of U.S. Printed Circuit Board (PrCB) Manufacturing
- Limited Domestic Capacity for Organic IC Substrate Manufacturing
- Obsolete Technology
- Congressional Action
Under 2020 Developments, it is sectioned as:
- Mergers and Acquisitions
- COVID impacts
- New Programs/Initiatives
Sections under a “sector outlook” include:
- Trusted Certifications
- Strategic Competition
- Emerging Trends/Technologies, with Figure 1 illustrating the advances required.
Figure 1: This table illustrates the advancements needed for Emerging and Foundational Technologies.
Lo and behold, “Advances in PCB and PrCB Manufacturing” has impact on every single Defense program in the future. Talk about preaching to the choir!
But what does the report have to say specifically about printed circuits? It recounts the fairly well-known statistics that small- and medium-size board shop numbers have fallen 16.3% and 25.6%, respectively, due to closures and acquisitions in the last five years. Defense depends on the specialty products from many of these shops for applications in radio frequency, controlled impedance, and short runs of legacy products. These product mix characteristics may not be attractive to larger, low-mix, high volume board shops that are highly automated.
Trusted manufacturing is a new concern from Defense that works both ways for the small- to medium-size board shop. While it would seem that steady Defense business would be an economic lifeline for small and medium shops, there are emerging national cybersecurity regulations that may play against small and medium shops. This new regulation, Cybersecurity Maturity Model Certification (CMMC), which I covered in my Defense Speaks column last year may be so expensive to implement that many shops will decline Defense work where it will be required by 2025. The Executive Agent is hoping to help the U.S. PrCB supply base to navigate these waters.
The Executive Agent and IPC had worked together to implement IPC 1791 Trusted Designer, Fabricator, and Assembler Requirements. That has been revised once and is nearing a second revision—a fast moving process. This document is the only security document called out in the Supply Base report!
Sadly, the Supply Base report calls out the lack of a U.S. manufacturing base for organic IC substrates. This $10 billion market for the most advanced board technologies is about 15% of the total world circuit board manufacturing revenue. Japan, Taiwan, Korea, and now China are the sources of these products, which are so very important to the consumer electronics segment—smart phones, wearables, etc. Sometimes these are called substrate-like PCBs or shortened to SLCs.
The report does take a casual look at electronics assembly, where the U.S. is much more self-sufficient. Many Defense Primes have maintained their own assembly facilities, while they long ago contracted out their bare board requirements. At least four of the top 20 board assembly companies (by revenue) are based in the U.S. One specialty segment of assembly, Outsourced Semiconductor Assembly and Test (OSAT), is lacking in the USA. OSATs are the first packaging step for integrated circuits—taking bare die, bonding them with wires or solder to some metallic substrate, and then encapsulating them against the environment. This may be thought of as converting a bare die into a ball grid array, or BGA package. The report states the 75% of the OSAT assembly and 98% of the test is in Asia. This is not surprising since the U.S. is so devoid of organic substrates, also.
Certainly, this analysis of the U.S. Industrial Base has far more content on printed circuits than I have ever seen. I am sure much of this is due to the data collection and reporting that the Executive Agent has done, and the credibility that the EA now carries within Defense. The proof this credibility will be the further award of Defense budget to improving the technology and competitiveness of the U.S. printed circuit supply chain.
- Report to Congress from the Acquisition and Sustainment
Dennis Fritz was a 20-year direct employee of MacDermid Inc. and retired after 12 years as a senior engineer at (SAIC) supporting the Naval Surface Warfare Center in Crane, Indiana. He was elected to the IPC Hall of Fame in 2012.