Washington, June 8, 2021 - IPC commends the Biden administration for completing its 100-day review of strategically important supply chains and for outlining bold actions to strengthen U.S. semiconductor manufacturing and ensure the availability of minerals critical to electronics manufacturing.

The results of the 100-day review are captured in an 11-page White House fact sheet and a 250-page report, released today. IPC believes the review has been helpful in bringing key issues into focus, including the importance of strengthening the entire electronics manufacturing ecosystem. The entire supply chain includes printed circuit board (PCB) and PCB assembly manufacturing; access to raw materials; and next-generation “advanced packaging” of substrate-based multichip modules.

IPC’s recommendations to the administration – many of which are reflected in the documents published today – are summarized in a recent letter to U.S. Commerce Secretary Gina Raimondo.

“For far too long, the U.S. Government has neglected its important role in strengthening the nation’s manufacturing base and instead has watched passively as other countries around the world invested in their manufacturing capabilities,” said IPC CEO John Mitchell. “U.S. electronics manufacturers appreciate the Biden administration’s decision to highlight the longstanding and significant challenges facing the U.S. electronics manufacturing base as a result.”

“This report outlines important, initial steps to address the current crisis and reaffirms the President’s commitment to preserve and extend U.S. leadership in innovation and advanced manufacturing. But addressing America’s manufacturing capacity decline will be a long process,” Mitchell added. “We look forward to working with the Executive Branch, Congress, and an array of stakeholders to reverse the erosion of the U.S. electronics industrial base and related risks to economic and national security.”

IPC and the electronics manufacturers it represents support the following actions being taken or proposed by the Biden administration:

• Address semiconductor shortages by expanding U.S. production of chips; creating a task force to address supply chain challenges in several electronics-dependent sectors; and investing in domestic “advanced packaging” capabilities, of which printed circuit boards (PCBs) and PCB assembly manufacturers are critical components.  
• Adjust federal acquisition policies to identify and support procurement of critical products like PCBs and printed circuit board assemblies.
• Bolster investment in domestic and international production of critical minerals, most notably though the Defense Production Act.  
• Strengthen U.S. apprenticeships programs to ensure a skilled workforce.
• Promote international cooperation to support supply chain resiliency, which will be critical because no nation in today’s world can be completely self-sufficient in electronics and manufacturing.
• Ensure a level playing field by addressing long-standing trade disputes.

In addition, IPC supports other efforts outlined by the Biden administration as part of this announcement to strengthen the U.S. industrial base, including:

• Appropriation of $50 billion in dedicated funding for semiconductor manufacturing and R&D;
• Establishment of a new Commerce Department Supply Chain Resilience Program, backed by no less than $50 billion in federal funding;
• Funding under the Defense Production Act to support manufacturing resilience in critical industries;
• Creation of sector-specific workforce education and training programs; and
• Support of the R&D and capital needs of small- and medium-sized businesses that that are the foundation of the U.S. electronics manufacturing base.

Washington, D.C. – June 8, 2021 – In a new IPC industry survey and report, one-quarter (24 percent) of electronic manufacturers say the costs and burdens of compliance with the Cybersecurity Maturity Model Certification (CMMC) may force them out of the U.S. Department of Defense’s (DoD) supply chain.

The survey conducted by IPC, the global electronics manufacturing association, also finds that for many small- to medium-size businesses (SMB), the costs and burdens of CMMC compliance may outweigh the benefits of doing business with the DoD.

In addition, 33 percent of respondents say the CMMC will weaken the U.S. defense electronics industrial base, while 18 percent are unsure, highlighting the uncertainties involved. And 41 percent believe applying the CMMC clause to their suppliers will create other problems in the supply chain.

“Cybersecurity is a must for U.S. national security, but the costs and burdens of achieving CMMC compliance under the current approach will likely force many small and medium-sized manufacturers out of the DoD supply chain, negatively impacting national security,” said John Mitchell, IPC president and CEO. “The objectives of CMMC are well-intentioned, but they must not be achieved at the expense of other key aspects of supply chain health.”

Most suppliers expect and are willing to spend upwards of $50,000 on CMMC readiness, and nearly one-third (32 percent) report that it will take them one to two years to prepare to undergo CMMC assessment. However, more than half of the suppliers say implementation costs of more than $100,000 would make CMMC readiness too expensive. DoD’s own cost analysis estimated the cost of a CMMC Maturity Level 3 (ML3) certification to be more than $118,000 in the first year. This means DoD’s own estimate of CMMC compliance costs is too high for 77 percent of the IPC survey respondents.

“The Pentagon needs to take into consideration that most SMBs do not have dedicated cybersecurity personnel to achieve the prerequisites, and while many commercial electronics manufacturers have considerable business with the defense community, they themselves do not consider themselves a defense contractor,” added Mitchell.

The study’s author, cyber security expert Leslie Weinstein, says the DoD can reduce the costs and uncertainties of CMMC compliance by leveraging existing industry standards and certifications, such as IPC-1791, the electronics industry’s “Trusted Supplier” standard, which was designed in collaboration with the DoD; or the certifications offered by HITRUST or the International Standards Organization.

“The DoD recognizes a variety of respected, industry-driven certifications when it comes to hiring cybersecurity professionals,” says Weinstein. “Taking the same approach to certifying suppliers would allow companies to invest more in security than in redundant audits, and it would quickly create a pool of companies who are able to bid on DoD solicitations containing the CMMC DFARS clause. And importantly, it would prevent further erosion of the U.S. defense industrial base.”    

IPC fielded the survey between February 25 and March 5, 2021 and garnered 108 responses from contract manufacturers, printed circuit board fabricators, original equipment manufacturers and suppliers who self-reported they are planning to undergo a CMMC assessment in the next five years.

About IPC

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 testing. 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.