Reading time ( words)
“Not every country plays by the same rules,” Happy Holden stated during a magazine planning meeting for this issue. We were discussing the recent news regarding the CHIPS for America Act that moved through the U.S. Congress last year. He continued, “The laws for banking and financing aren’t the same everywhere, you know.”
He’s right, of course. Individual countries finance and subsidize industry development to their own laws and restrictions. There’s nothing new in this situation, really. It’s always been this way; countries have often taken whatever measures were necessary to develop an industry they saw as lucrative, crucial to their economic development, or strategically important to their defense.
This observation from Happy, however, was particularly timely, since we were discussing the U.S. legislation to bolster “the electronics industry,” but which only seems to focus on semiconductor manufacturing. Anyone reading this magazine already knows that simply making more semiconductor components is not a solution to the problem, that the chips are not useful until integrated into the entire system, and that it takes chip packaging, printed circuit board fabrication, and assembly services to create the completed electronics assemblies. However, the policy makers on Capitol Hill generally seem to be unaware of this connection. The result? Investment in only a portion of the supply chain.
Study the rationale for the strategic investment, and you’ll see that the U.S. now wishes to fix gaps in the domestic supply chain. One literally cannot manufacture a semiconductor component for production entirely within the North American borders—effectively all production semiconductors must be shipped across an ocean to be placed into packaging. Should diplomatic relations turn sour with any of the countries who have chip packaging capability, and U.S. tech is stuck, unable to make product.
The state of printed circuit manufacturing is not quite as dire as chip packaging, but the situation is quite serious. In a recent IPC analysis, Joe O’Neil points out that North America’s total PCB manufacturing capacity is not enough to manufacture the number of iPhones imported to the continent. Think about that: Apple’s circuit board appetite alone could bury the U.S. manufacturing infrastructure.
Depending upon what the U.S. government wishes to accomplish with strategic investment, a massive buildout of PCB fabrication capacity may not be the intended goal. If the goal were, for example, to ensure that the U.S. could manufacture all defense-related electronics within U.S. borders, then iPhone volumes are probably not necessary. Still, the last two or three years have taught us all that the supply chain can become too optimized, too single-sourced. Added capacity of all types will benefit the ability of the U.S. to maintain a resilient supply chain.
There’s also a skills gap when a country’s scientists and engineers can design something but cannot build it themselves because they don’t have that expertise.I-Connect007 has covered this topic in the past, and it has been an ongoing topic of outreach to the U.S. government as well. But here’s a point to ponder: It’s not just a North American issue, as other regions face many of the same chokepoints in their manufacturing chain as well. To that end, our March issue expands beyond just the U.S. strategic investment legislation by including some perspective on the European Union’s approach to similar legislation. We also bring you an M&A perspective from Tom Kastner, and articles on how to minimize quoting time. ICAPE’s Stanley Bentley posts a piece answering the question, “Where Have All the Board Shops Gone?”
Columnists this month include Michael Ford, Bob Wettermann, and Dr. Ron Lasky, as well as a new column from Hannah Nelson and Paige Fiet.
We’ve taken care to sprinkle some theme-appropriate video interviews from IPC APEX EXPO in this issue; to see all the interviews, be sure to pop over to www.realtimewith.com. In addition, the 2022 edition of the Real Time with… IPC APEX EXPO Show & Tell Magazine is now available for download. This special edition provides comprehensive coverage of the industry’s biggest show and is not to be missed.
This column originally appears in the March issue of SMT007 Magazine.
