When the CHIPS Act passed last year, there was much celebration, and federal funds are now flowing at the state and local levels.
The Department of Commerce designated two locations in Illinois as part of 31 regional tech hubs supporting the CHIPS Act, which was created because we produced only 12% of the world’s supply of semiconductors, also known as chips.
The COVID-19 pandemic was a wake-up call for manufacturers of everything from F-150 trucks to F-35 aircraft. Consumers and lawmakers had learned the downside of relying on electronic components made in faraway lands. Even though the CHIPS Act claims to solve this dependency, it does so for only one-third of the technology stack that electronic devices need to operate. Chips don’t float. To function, each chip needs a substrate and a printed circuit board, or PCB. Without those two components, all you have is an expensive piece of silicon.
Often mistaken for simple green pieces of plastic, PCBs are complex and precisely engineered, forming the central nervous system that enables the chip to control the function of an electronic system. Many necessities in modern life, from air conditioners to defense and space systems, could not function without PCBs.
Even though America invented and led the world in PCB technology, our share of worldwide PCB production shrank from 30% to 4% of the world’s supply over 30 years. In the same period, the number of PCB companies fell from more than 2,000 to fewer than 150 today. Today we make less than 1% of the world’s supply of substrates, with the rest made in Asia. How did this happen? Manufacturing migrated to Asia to chase low wages and government subsidies.
The U.S. now finds itself vulnerable to supply chain disruptions caused by either political decisions or natural disasters in distant countries. Violence against ships in choke points like the Red Sea, other areas of conflict, and repeated earthquakes in Taiwan are reminders of how fragile long supply chains are.
In the Chicago area, the remaining PCB manufacturers are working hard to produce what America needs. Since 1988, the 150 employees of American Standard Circuits in West Chicago have produced PCBs for the military-aerospace, medical, communications, industrial and automotive markets. Over in Elk Grove, since 1985 Amitron has provided high-quality PCB solutions for a wide range of industries, including telecommunications, automotive, aerospace and consumer electronics.
Despite the commitment of companies like American Standard Circuits and Amitron, the U.S. does not produce enough PCBs and base materials to create a secure, trusted and resilient domestic supply chain. We are too dependent on distant countries for PCBs and other materials in the electronics that power critical infrastructure.
The CHIPS Act created funding and attracted investment for chips, but without concurrent support for increased domestic sources of PCBs and substrates, most of those new “Made in America” chips will be shipped across the world for advanced packaging with foreign-made PCBs and substrates. We don’t solve the supply chain problem by only addressing a third of the ecosystem.
To nurture and grow the entire microelectronics ecosystem, we are asking Congress to pass H.R. 3249, the Protecting Circuit Boards and Substrates Act. The act calls for a 25% tax credit for companies buying American-made PCBs, along with a $3 billion investment in related research and development, physical plant and workforce development efforts.
It’s time to finish the work that the CHIPS Act started and level the playing field for American companies, including those right here in Illinois. The act would help achieve our national goal of a secure, trusted and resilient national microelectronic supply chain. Our national and economic security depends on it.
Aidan Salvi is Chief Transformation Officer of Amitron in Elk Grove Village. Anaya Cardya is president and CEO of American Standard Circuits in West Chicago. Shane Whiteside is chairman of the Printed Circuit Board Association of America and president and CEO of Summit Interconnect in Irvine, California.
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