Feb 25, 2021 IPC commends President Biden for ordering a review of industrial supply chains critical to U.S. economic growth, innovation, and security.
The crippling shortage of semiconductor chips underscores the economic and national security importance of restoring U.S. leadership in electronics manufacturing.
The U.S. printed circuit board industry, which once accounted for more than 30 percent of total global production, today accounts for less than 5 percent. Only four of the top 20 electronics manufacturing services (EMS) companies are based in the United States.
Since around 2000, the drive for low-cost electronics has pushed hardware manufacturing offshore, often to countries that understood the strategic importance of electronics manufacturing and heavily promoted and subsidized the growth of their domestic industries.
But this drawdown in American manufacturing has increased volatility and undermined the supply chains that are critical for electronics manufacturing and other sectors to operate smoothly. And this isn’t the first time that we’ve experienced shortages as a result. During the pandemic, a shortage in printed circuit boards slowed the production of ventilators when hospitals around the world were in desperate need.
As the Biden administration undertakes its review of U.S. supply chains, IPC urges it to recognize two important realities about electronics manufacturing:
- Electronics manufacturing is a foundation for the manufacturing sector across the U.S. economy. Virtually every other sector relies on electronics to greater or lesser extent.
- U.S. leaders must see the electronics supply chain as an ecosystem. All segments of the electronics industry must be strong for the entire ecosystem to thrive. Semiconductor fabrication is just one segment in a sophisticated, global supply chain for electronics.
The good news is that the time is ripe for greater U.S. government support of manufacturing. The industry is on the cusp of transformation, powered by artificial intelligence, automation, quantum computing, and blockchain technologies. With U.S. government support, American companies will find new opportunities to compete in the global marketplace while creating new, skilled jobs for American workers.
The review ordered by President Biden should assess electronics manufacturing holistically. Praiseworthy investments in semiconductor manufacturing (including those envisioned in the CHIPS for America Act) also require investments in other segments of the industry. The government should support the industry’s migration to the factory of the future by creating and sustaining programs to drive capital expenditures, workforce education and credentialing, research and development of core technologies, and more robust domestic availability of raw materials.
IPC (www.IPC.org) is a global industry association based in Bannockburn, Ill., dedicated to the competitive excellence and financial success of its nearly 3,000 member companies which represent all facets of the electronics industry, including design, printed board manufacturing, electronics assembly and test. As a member-driven organization and leading source for industry standards, training, market research and public policy advocacy, IPC supports programs to meet the needs of an estimated $2 trillion global electronics industry.
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