The Government Circuit: Ready to Tackle 2022

Happy 2022! I hope everyone had a safe and happy holiday season. 

As anticipated, it was a busy close to 2021 in Washington, and we saw resolutions on several major legislative priorities, including the annual defense authorization bill, which affects billions in future defense electronics spending. Meanwhile, negotiations on the U.S. Innovation and Competitiveness Act (USICA) remain on the back burner but could heat up in Q1. Read on for some of the recent highlights from 2021 and a look forward to 2022. 

It is an exciting time to be involved in our industry, and we hope you’ll remain engaged with IPC this year. We’re looking forward to building off our successes and, with your help, achieving more victories for the entire electronics manufacturing industry. 

New IPC Report to Warn U.S. Leadership in Electronics On ‘Brink of Extinction’
If the U.S. government (USG) wants to achieve greater innovation, resiliency, and security in the semiconductor supply chain, its investments in semiconductors must be paired with robust, multibillion-dollar investments in advanced packaging of chips and especially in advanced IC-substrates. 

Those were among the key findings of a new IPC report, which made 28 recommendations to address the gaps in industry capabilities and capacity in North America. We hope you’ll take the time to check it out and share it with your networks. 

Another IPC report is coming soon from IPC Thought Leadership Program member Joe O’Neil documenting longstanding gaps in the printed circuit board (PCB) sector and why PCBs deserve much more supportive USG policy. The report will caution that the lack of any significant USG support for the sector will continue to leave the nation dangerously exposed to foreign dominance of the electronics supply chain.

IPC will continue to make the case to policymakers that without investment in other areas in the electronics ecosystem, the United States will be unable to manufacture the cutting-edge electronics it designs. IPC is increasing its government advocacy and industry leadership on these issues in 2022. 

IPC Advocates for Transatlantic Cooperation on Resilient Supply Chains
The United States and Europe remain far behind international competitors in advanced packaging of printed circuit board assemblies (PCBAs), but we’re working to bring about a better policy environment to fix that. IPC recently made the case for a resilient electronics manufacturing ecosystem and further investments in advanced packaging at the inaugural meeting of the European Commission’s consultation on secure supply chains. IPC welcomed the transatlantic focus on secure supply of semiconductors under the U.S.-EU Trade and Technology Council (TTC) and plans to submit additional comments to the commission on this issue. IPC will continue to engage with policymakers to ensure the electronics value chain is recognized as central to economies on both sides of the Atlantic. 

The Electronics Supply Chain Outlook Remains Tenuous
2021 was a tumultuous year and many of the risk factors will continue through at least the first half of 2022. The onset of the Omicron variant has stalled any progress made on the supply chain outlook, and IPC’s latest reports on the industry’s sentiment and the global economic outlook suggest that many electronics manufacturers continue to struggle with a challenging environment. 

According to IPC’s January Global Sentiment Survey, nine in 10 electronics manufacturers report rising materials costs, and more than three-fourths reporting rising labor costs. Though order flows continue to be strong, and both capacity utilization and shipments are expanding, respondents reported growing backlogs and shrinking profit margins. 

These tight profit margins are expected to continue through at least the first half of 2022, and the trajectory of the economy may follow the trajectory of the COVID pandemic. Workforce issues also continue to hamper the industry, and the ease of recruiting skilled talent is expected to persist. 

For more on what supply chain challenges may lie ahead, be sure to check out IPC Chief Economist Shawn DuBravac’s Monthly Economic Outlook Report on the IPC website. Stay tuned for next month’s reports, and please reach out if you have any questions. 

U.S. Defense Missions Depend on Completing Lead-Free R&D
The U.S. defense and aerospace community’s reliance on outdated electronics designs is creating an opportunity for our rivals to surpass U.S. technology in the coming years. With lead-based electronics becoming more difficult and expensive for the Department of Defense (DoD) to procure, it is imperative to complete the transition to lead-free. The lead-free research funding level is due to be decided in Congress within the coming weeks. Read a recent op-ed by IPC member David Raby in for more on this issue1

Meanwhile, the U.S. Partnership for Assured Electronics (USPAE) was the recent recipient of an $8.95 million award from the DoD to grow the Defense Electronics Consortium (DEC) and expand its work on the Solder Performance and Reliability Assurance Project. Follow USPAE on LinkedIn or reach out directly to them if you have any questions. 

We expect there to be a growing focus on the security and resiliency of electronics supply chains, a long-neglected but critically important segment of the electronics manufacturing industry. IPC will continue to be at the forefront of this discussion and to advocate for a five-year, $40 million investment in a public-private research and development (R&D) program, which industry experts believe would yield more than $100 million in U.S. defense savings per year and improve military readiness and overall innovation. 

Biden Signs Compromise NDAA
Elsewhere in defense news, U.S. President Biden signed a compromise version of the National Defense Authorization Act (NDAA) on December 27. Notably, the $768 billion annual defense policy bill, which passed with bipartisan support and will increase the Pentagon’s budget by $24 billion, includes restrictions on acquisitions of certain printed circuit boards (PCBs) susceptible to interference by the Chinese government. The NDAA also contains numerous provisions for cleaning up military communities impacted by per- and polyfluoroalkyl substances (PFAS) contamination, but they are unlikely to affect electronics manufacturers. 

Dynamic Environmental Policy Landscape Expected in 2022
Environmental regulations continue to be a top-of-mind concern for our members, and the EU and U.S. regulatory agendas are crowded with chemical and product policies that will affect electronics manufacturers in 2022. 

In Europe, IPC expects revisions to the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulation, a review of the Restriction of Hazardous Substances (RoHS) Directive, and legislative action on the Sustainable Products Initiative. In the United States, we anticipate consultations on Toxic Substances Control Act (TSCA) risk evaluations and on the risk management of existing chemicals. 

Ramped Up Activity at U.S. EPA
The U.S. Environmental Protection Agency (EPA) had a busy 2021, and we found them to be receptive to our concerns. 

IPC, alongside our peer groups CTA and ITI, coordinated on a joint response offering industry support for the EPA’s proposed compliance deadline for phenol, isopropylated phosphate (3:1)—PIP (3:1)—a chemical substance used as a flame retardant and plasticizer in electronics. The joint comments also reiterated several requests for clarifications and exemptions for uses of PIP (3:1). In 2021, IPC engaged with industry members and the EPA to ensure a reasonable plan for a future prohibition of the manufacture and distribution of PIP (3:1) and articles containing this chemical substance. 

Meanwhile, on December 8, U.S. President Joe Biden signed an Executive Order (EO) that set environmental policy goals for the federal government to achieve by 2050. In one key area, the EO directed the federal government’s procurement efforts to prioritize “the purchase of sustainable products, such as products without added PFAS.” However, some PFAS are used to make electronics purchased by the federal government. This is an opportunity for the electronics industry to educate policymakers about the widespread use of PFAS, the risks associated with those uses, and the tradeoffs associated with trying to identify and implement safer alternatives. 

IPC’s environmental advocacy team will be busy monitoring and engaging on these topics for you in 2022. 

Which Government Policy Issues Are You Concerned About?
Our industry wins when you are active and engaged, and the success of our work depends on the active participation of IPC members. As you plan out your agenda for the start of the year, consider letting us know where you stand on the issues so we can best advocate for you now and in the future.

Throughout 2021, we asked IPC members about the key challenges they are facing. Allison Budvarson of Renton, WA., noted that trade and tariffs are "leading to component supply issues" and are having "a very real effect on my ability to ship product." Does this issue affect you? Let us know your top concerns via this five-minute, five-question survey as we kick off the new year.

IPC to Hold Virtual IMPACT Washington, D.C.
By the way, IPC’s signature U.S. advocacy event—IMPACT Washington, D.C.—will take place in March. We had hoped for an in-person IMPACT, but due to current uncertainties surrounding COVID-19 and the new omicron variant, policymakers are not expected to be taking meetings with large groups at that time. 

Although 2021 was a difficult year for many of us, we look forward to continuing to work with IPC members and policymakers to advance policies that promote increased innovation, investment, and growth in electronics over the coming decades.

Please let me know if you have any questions and suggestions for IPC advocacy this year. With your help, we can begin the new year in a strong position to advance our advocacy goals.

“Guest opinion: U.S. defense missions depend on completing Alabama-based R&D,” byDavid Raby,, Dec. 16, 2021. 

Chris Mitchell is IPC’s VP of global government affairs. Contact him at



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As anticipated, it was a busy close to 2021 in Washington, and we saw resolutions on several major legislative priorities, including the annual defense authorization bill, which affects billions in future defense electronics spending. Meanwhile, negotiations on the U.S. Innovation and Competitiveness Act (USICA) remain on the back burner but could heat up in Q1. Read on for some of the recent highlights from 2021 and a look forward to 2022.

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