Electronics Industry Commends U.S. House Action on America COMPETES Act, Which Boosts Funding for Chips and Related Electronics Technologies

The electronics manufacturing industry is applauding a bill being voted on this week in the U.S. House of Representatives, which would, if enacted, launch a new era of federal government partnership with the industry.

IPC supports H.R. 4521, the America COMPETES Act and its objective of strengthening the United States’ technology capabilities.

Like its Senate counterpart, the U.S. Innovation and Competitiveness Act (USICA), the America COMPETES Act contains $52 billion to strengthen the U.S. semiconductor industry and implement the CHIPS for America Act. Also like the Senate bill, the House bill would boost federal investment in research and development (R&D) in a variety of technologies.

Notably, the House bill would appropriate at least $2.5 billion in fiscal 2023 for advanced packaging R&D, aimed at helping U.S.-based companies adopt new techniques to electronically connect multiple chips in a single package through integrated circuit substrates. In a post-Moore’s Law world, with the pace of improvements in chips slowing down, advanced packaging offers an alternative way to achieve more computing power and economic efficiency. 

A report last week from the U.S. Commerce Department called for urgent action on semiconductors. But chips do not function on their own. Recent IPC studies have urged Congress to combine its investments in semiconductor manufacturing with additional support for advanced packaging, printed circuit boards (PCBs), and related technologies. Without such action, U.S.-made chips would still need to be sent offshore to be manufactured into finished products, leaving the U.S. vulnerable to supply chain shocks. 

“We’re pleased to see Congress making progress on the bipartisan goal of re-establishing U.S. leadership in advanced electronics, which power everything from automobiles to medical devices, aircraft, smartphones, and beyond,” said IPC President and CEO John W. Mitchell. “This bill has the potential to begin rebuilding the U.S. electronics manufacturing ecosystem.”

Adds Chris Mitchell, IPC vice president of global government relations, “While the U.S. has allowed its domestic electronics industries to atrophy, America’s competitors have invested heavily in theirs. This legislation is an opportunity to put America on pace to rebuild this crucial industry, which is so vital to our future security and prosperity.”

IMDS - International Material Data Systems: Implications on Electronic Suppliers

Feb 02, 2022

This blog piece was written by AIAG’s Supplier Alliance Committee, which works globally with JAPIA and CLEPA to provide feedback to the IMDS Steering Committee on specific issues impacting suppliers

The International Material Data System (IMDS) has been the global automotive product declaration system for more than 20 years. With over 200,000 companies collecting about 90M declarations, the automotive industry has gathered unparalleled information about product and material content.

Historically, IMDS Recommendation 019 (referred to as Rec019) semi-components allowed automotive electronics companies to use a generic shortcut if they collected and stored the underlying compliance information. Companies were also required to add any materials not in line with the generic composition. Recently, the Substances of Concern in Products (SCIP) database under the Waste Framework Directive and other chemical and product regulatory pressures have led to the immediate modification of most IMDS electronics data. While many companies use industry materials declaration standards (e.g., IPC-1752 or -1754) and other formats beyond IMDS, the SCIP database and other data-reporting requirements are driving the need to capture material classifications for SVHC identification purposes.

Highlights of the Recent IMDS Changes

  • Removal of the populated laminate based Rec019 semi-components in IMDS
  • Removal of the 8.x Electronics material classification to be replaced with specific IMDS material classifications had the biggest impact on the electronic component suppliers.
  • Cross-industry agreement on material classifications for electronics materials (e.g., mold compound as 5.4.3 Other Duromer)
  • Retention of rules and guidelines for materials in >5g components, norms and standards are optional
  • Best Practice – when creating a non-standard material, with no applicable norm or standard, especially metals, include a comment in the remarks field noting that an ‘industry norm or standard is not applicable’

What’s Next?

  • Future Model Office testing for the ability to use ‘mixed nodes’ – meaning a product can be composed of a component, semi-component and/or material on the same tree level
  • Further need to identify what are considered articles instead of materials under the 05A ruling
  • Joint efforts by AIAG, IPC, SIA & ESIA members in developing and proposing best practices for electronics reporting into the IMDS have resulted in paving a path forward. Further improvements are expected, and all electronics input is welcome.

AIAG is always looking for new members to participate on its Supplier Alliance Committee – please contact Lecedra Welch at lwelch@aiag.org for more information.

IPC Honors Apple, Inc. and MacDermid Alpha Electronic Solutions with Corporate Recognition Awards

IPC presented its highest corporate honors to two IPC member companies, Apple Inc., and MacDermid Alpha Electronic Solutions during the IPC Annual Meeting/Awards Ceremony at IPC APEX EXPO 2022. The Peter Sarmanian Corporate Recognition Award was presented to MacDermid Alpha Electronics Solutions, and the Stan Plzak Corporate Recognition Award was presented to Apple, Inc.                                                       

The Peter Samarian Corporate Recognition award, named for a former IPC Board Chairman, recognizes an IPC-member company in the printed board industry (PCB) that has supported IPC through participation in technical and management programs while providing leadership for the industry. 

IPC members since 1962, MacDermid Alpha Electronics Solutions lends nearly two dozen employees to participate in IPC standards development committees ranging from printed board fabrication and electronics assembly to automotive electronics and press-fit technology. Numerous company employees have received awards for contributions to standards development, and many staff members have presented at IPC workshops and conferences.

Named for former IPC Board Chairman and founding member of the IPC Electronics Manufacturing Services Industry Management Council, the IPC Stan Plzak Corporate Recognition Award honors an IPC-member company in the electronics assembly industry (EMS) that actively contributes to the industry while supporting IPC technical and/or management programs.    

Apple staff members are active on multiple technical committees ranging from product design to materials declaration and green cleaners. They have been instrumental in helping IPC and the industry to develop a new standard, IPC-1402, Standard for Green Cleaners Used in Electronics Manufacturing, a standard that defines the criteria for what constitutes a green cleaner for electronics manufacturing and will specifically apply to cleaners used in the manufacture of electronic assemblies, components, and materials.  Enthusiastic supporters of IPC training, 40 Apple engineers have participated in the Electronics Assembly for Engineers course.            

“IPC benefits tremendously from Apple and MacDermid Alpha’s leadership, knowledge and expertise,” said John W. Mitchell, IPC president and CEO. “Their involvement in IPC has directly contributed to IPC’s global growth in the electronics industry.”

 

IPC’s Highest Honor, the Raymond E. Pritchard Hall of Fame Award, Presented to Joe O’Neil, Long-time IPC Volunteer

In recognition and acknowledgment of his extraordinary contributions to IPC and the electronics industry, Joe O’Neil, OAA Ventures, was presented with the IPC Raymond E. Pritchard Hall of Fame Award at IPC APEX EXPO on Tuesday, January 25. IPC’s most prestigious award, the Hall of Fame is given to individuals who have provided exceptional service and advancement to IPC and the electronics industry.

O’Neil, principal at OAA Ventures, formerly served as CEO of Green Circuits. An exceptionally involved IPC volunteer, he was an active participant in the IPC Cares program, the IPC Workforce Champions initiative, and served on the IPC Board from 2006 to 2018, most recently as Chairman of the Board. A member of the Global Government Relations Committee, and Board Chair of the IPC Education Foundation (IPCEF), O’Neil also serves on the IPC Thought Leaders Program, and recently published, “Printed Circuit Boards Matter: Rebuilding the U.S. Electronics Supply Chain,” a report that outlines steps that the U.S. Government and the industry itself must take if it is to survive in the United States.

“Described as a ‘true industry leader’ by his peers, Joe is among the first to volunteer himself and does so without ego and in the spirit of collaboration, speaking with authority on both technology trends and operations. Understanding both the needs of business and industry, he brings his excitement about what is happening now in electronics manufacturing, and what is possible in the future,” said John W. Mitchell, IPC president and CEO.

“Joe is a true leader in the global electronics industry and has made immense and long-lasting contributions to IPC and to electronics manufacturing,” Mitchell added. “We are thrilled to welcome him as the newest Hall of Fame inductee.”  

North American EMS Industry Up 0.9 Percent in December

IPC announced today the December 2021 findings from its North American Electronics Manufacturing Services (EMS) Statistical Program. The book-to-bill ratio stands at 1.55.

Total North American EMS shipments in December 2021 were up 0.9 percent compared to the same month last year. Compared to the preceding month, December shipments rose 8.0 percent.

EMS bookings in December rose 47.1 percent year-over-year and rose 13.8 percent from the previous month.

“IPC recorded the strongest monthly North American EMS bookings on record in December 2021,” said Shawn DuBravac, IPC’s chief economist. “Strong bookings pushed the book-to-bill to near record levels, tying levels in May 2021 and only slightly below the all-time record high set in April 2021.”

December 2021 EMS book to bill ratio chart

Detailed Data Available

Companies that participate in IPC’s North American EMS Statistical Program have access to detailed findings on EMS sales growth by type of production and company size tier, order growth and backlogs by company size tier, vertical market growth, the EMS book-to-bill ratio, 3-month and 12-month sales outlooks, and other timely data.

Interpreting the Data

The book-to-bill ratios are calculated by dividing the value of orders booked over the past three months by the value of sales billed during the same period from companies in IPC’s survey sample. A ratio of more than 1.00 suggests that current demand is ahead of supply, which is a positive indicator for sales growth over the next three to twelve months. A ratio of less than 1.00 indicates the reverse.

Year-on-year and year-to-date growth rates provide the most meaningful view of industry growth. Month-to-month comparisons should be made with caution as they reflect seasonal effects and short-term volatility. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month might not be significant unless a trend of more than three consecutive months is apparent. It is also important to consider changes in both bookings and shipments to understand what is driving changes in the book-to-bill ratio.

IPC’s monthly EMS industry statistics are based on data provided by a representative sample of assembly equipment manufacturers selling in the USA and Canada. IPC publishes the EMS book-to-bill ratio by the end of each month.

North American PCB Industry Sales Up 16.9 Percent in December

IPC announced today the December 2021 findings from its North American Printed Circuit Board (PCB) Statistical Program. The book-to-bill ratio stands at 1.17.

Total North American PCB shipments in December 2021 were up 16.9 percent compared to the same month last year. Compared to the preceding month, December shipments grew 21.5 percent.

PCB year-to-date bookings in December were up 33.6 percent compared to last year. Bookings in December grew 47.1 percent from the previous month.

"PCB bookings rose sharply in December 2021, the strongest month of bookings since December 2005,” said Shawn DuBravac, IPC’s chief economist. “For the calendar year, bookings rose 19.3 percent and shipments rose 6.7 percent."

December 2021 book to bill ratio chart 1
December 2021 book to bill ratio chart 2

Detailed Data Available

Companies that participate in IPC’s North American PCB Statistical Program have access to detailed findings on rigid PCB and flexible circuit sales and orders, including separate rigid and flex book-to-bill ratios, growth trends by product types and company size tiers, demand for prototypes, sales growth to military and medical markets, and other timely data.

Interpreting the Data

The book-to-bill ratios are calculated by dividing the value of orders booked over the past three months by the value of sales billed during the same period from companies in IPC’s survey sample. A ratio of more than 1.00 suggests that current demand is ahead of supply, which is a positive indicator for sales growth over the next three to twelve months. A ratio of less than 1.00 indicates the reverse.

Year-on-year and year-to-date growth rates provide the most meaningful view of industry growth. Month-to-month comparisons should be made with caution as they reflect seasonal effects and short-term volatility. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month might not be significant unless a trend of more than three consecutive months is apparent. It is also important to consider changes in both bookings and shipments to understand what is driving changes in the book-to-bill ratio.

IPC’s monthly PCB industry statistics are based on data provided by a representative sample of both rigid PCB and flexible circuit manufacturers selling in the USA and Canada. IPC publishes the PCB book-to-bill ratio by the end of each month.

High Material and Labor Costs Continue to Challenge the Electronics Manufacturing Industry

New data from IPC show that supply chain challenges remain acute, but may have peaked, while lead times remain high. IPC’s February economic update and global electronics manufacturing supply chain sentiment reports found that high material and labor costs are expected to continue for at least six months while recruiting and finding skilled talent continues to be difficult.

Among other conclusions, the global electronics manufacturing survey results show:

  • Nearly nine in ten electronics manufacturers report material costs are rising, with an additional four-fifths reporting rising labor costs
  • Only 13 percent of the electronics manufacturing supply chain reports inventory is growing and one in ten say inventories from their suppliers are growing
  • Ease of recruitment and profit margins are currently declining, along with inventories, especially those available from suppliers
  • The electronics supply chain reports orders, shipments, and capacity utilization are expanding, but weak inventory availability and higher costs for materials and labor hurts profit margins

The data on future economic outlook suggests growth is decelerating, but good growth is expected in the year ahead. After growing 6.1 percent in 2021, global growth is expected to slow to 4 percent in 2022 and close to that in 2023. In North America, growth will fall from 5.4 percent in 2021 to 3.7 percent in 2022. In 2023, growth is expected to slow further, anticipated at 2.6 percent. In Europe, growth is expected to slip this year from 5 percent to 4 percent and decline to 2.4 percent next year. In Asia, growth is expected to fall from 6.7 percent to 4.8 percent this year. Five percent growth in Asia is predicted for 2023.

“While growth slows this year, this should not necessarily be interpreted as weak growth,” said Shawn DuBravac, IPC chief economist. “Growth rates in 2022 will generally be higher than they were headed into the pandemic.”

IPC surveyed hundreds of companies from around the world, including a wide range of company sizes representing the full electronics manufacturing value chain.

View full reports: 

IPC Announces New Board Members at IPC APEX EXPO 2022

At the 65th IPC Annual Meeting on January 25, held in conjunction with IPC APEX EXPO 2022, the IPC Board of Directors announced new officers and members. Board officers serve a two-year term; board members serve a four-year term, and student board member serves a one-year term.  

The newly elected Board officers are:

  • IPC Board Chair: Bob Neves, chairman and CTO, Microtek Laboratories
  • IPC Board Vice Chair: Tom Edman, president and CEO, TTM Technologies
  • IPC Board Secretary/Treasurer: Jeff Timms, CEO and General Manager, ASM Assembly Solutions of America

The newly elected Board members are:

  • First-term Board Member: Lisa Weeks, Senior Vice President, Chief Strategy Officer, and Head of Investor Relations, Benchmark Electronics
  • First-term Board Member: Joe DeMan, President, Interconnect Dynamics – An Amphenol Global Solutions Provider
  • Second-term Board Member: Jay Hill, Chief Technology Officer, Molecular Imaging and Computed Tomography, GE Healthcare
  • Student Board Member: Hannah Nelson, Valparaiso University

"IPC is privileged to add these outstanding professionals to our current slate of Board members, said John W. Mitchell, IPC president and CEO. “We look forward to working with them as we advance the global electronics manufacturing industry and build electronics better.”                   

For additional information on IPC's Board of Directors including bios on newly elected Board members, contact Sandy Gentry, IPC communications director, at SandyGentry@ipc.org. For information on IPC APEX EXPO, visit www.ipcapexexpo.org.

Flaws in U.S. Approach to Electronics Manufacturing Require Urgent Changes, or Nation Will Grow More Reliant on Foreign Suppliers, New Report Says

U.S. circuit board sector is in worse trouble than semiconductors, with potentially dire consequences

The United States has lost its historic dominance in a foundational area of electronics technology – printed circuit boards (PCBs) – and the lack of any significant U.S. Government support for the sector is leaving the nation’s economy and national security dangerously reliant on foreign suppliers.  

These are among the conclusions of a new report published by IPC, the global association of electronics manufacturers, which outlines steps that the U.S. Government and the industry itself must take if it is to survive in the United States.

The report, written by industry veteran Joe O’Neil under IPC’s Thought Leaders Program, was prompted in part by the Senate-passed U.S. Innovation and Competitiveness Act (USICA) and similar legislation being prepared in the House. O’Neil writes that for any such measures to achieve their stated goals, Congress must ensure that printed circuit boards (PCBs) and related technologies are covered by it. Otherwise, the United States will become increasingly unable to manufacture the cutting-edge electronics systems it designs.

“The PCB fabrication sector in the United States is in worse trouble than the semiconductor sector, and it’s time for both industry and government to make some significant changes to address that,” writes O’Neil, the principal of OAA Ventures in San Jose, California. “Otherwise, the PCB sector may soon face extinction in the United States, putting America’s future at risk.”

Since 2000, the U.S. share of global PCB production has fallen from over 30% to just 4%, with China now dominating the sector at around 50%. Only four of the top 20 electronics manufacturing services (EMS) companies are based in the United States.

Any loss of access to China’s PCB production would be “catastrophic,” with computers, telecommunications networks, medical equipment, aerospace, cars and trucks, and other industries already dependent on non-U.S. electronics suppliers.

To fix this problem, “the industry needs to intensify its focus on research and development (R&D), standards, and automation, and the U.S. Government needs to provide supportive policy, including greater investment in PCB-related R&D,” O’Neil says. “With that interconnected, two-track approach, the domestic industry could regain the ability to meet the needs of critical industries in the coming decades.”

Adds Chris Mitchell, vice president of global government relations for IPC, “The U.S. Government and all stakeholders need to recognize that every piece of the electronics ecosystem is vitally important to all the others, and they must all be nurtured if the government’s goal is to re-establish U.S. independence and leadership in advanced electronics for critical applications.”

IPC’s Thought Leaders Program (TLP) taps the knowledge of industry experts to inform its efforts on key change drivers and to offer valuable insights to IPC members and external stakeholders. TLP experts provide ideas and insights in five areas: education and workforce; technology and innovation; the economy; key markets; and environment and safety  

This is the first in a planned series by the IPC Thought Leaders on gaps and challenges in the PCB and related electronics manufacturing supply chains.  

IPC Advocates for Transatlantic Cooperation on Resilient Supply Chains

Jan 20, 2022

By Alison James, IPC Senior Director, Government Relations, Europe

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.

The consultation took place in the context of the EU-U.S. Trade and Technology Council (TTC), which was launched last September to foster transatlantic collaboration on critical issues like technological innovation, trade, supply chain resiliency, and economic issues. A second high-level meeting of the TTC is planned for Spring 2022. The TTC has also identified strengthening the semiconductor supply chain as a priority area amid the ongoing chip shortage, and government investments are being planned via “Chips Acts” on both sides of the Atlantic. 

IPC supports investments to stem the chip shortage, but if the EU and U.S. governments want to achieve greater innovation, resiliency, and security, they must also build up the entire electronics manufacturing ecosystem. This cannot be done alone; addressing capability and capacity gaps must be a transatlantic priority. IPC calls on the TTC to recognize the strategic importance of robust electronics manufacturing supply chains and to take a “Silicon-to-System” approach to strengthening the industry.

To achieve this, IPC recommends:

  • A mechanism for regular analysis of the global electronics supply chain with special focus on strengthening transatlantic supply chain resiliency;
  • Development of transatlantic trusted supplier programs that promote sourcing of electronics for sensitive technologies from European and U.S. manufacturers that demonstrate a commitment to high security and quality standards;
  • Greater opportunities for joint research and development with a focus on segments of the electronics manufacturing industry that have highly constrained resources for research; and
  • Promoting EU-U.S. partnerships through government funding to strengthen semiconductor advanced packaging capabilities.

IPC further calls for the European Union and the United States Government to accelerate transitions to Factories of the Future and to highlight the role of international, industry-led standards in enabling closer transatlantic industry collaboration.

IPC will continue to engage with policymakers on both sides of the Atlantic and will continue to advocate for needed investments across the electronics manufacturing ecosystem.

 

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