By Chris Mitchell, vice president, global government relations IPC APEX EXPO is always a fascinating kaleidoscope of electronics manufacturing excellence, and APEX EXPO 2020 was no exception. Most of the show’s content is relatively technical in nature. But it all comes down to making amazing things possible for the industry’s customers. Here are my top take-aways from this year’s show, from the perspective of someone whose job it is to explain our industry and its concerns to non-technical government policymakers. 1) The factory of the future continues to be a priority. According to a recent McKinsey survey, more than two-thirds of industrial companies are making digitization of their factories their top priority. This trend was reflected at APEX EXPO in the growing number of committee participants in the IPC Connected Factory Exchange (CFX) standard, which standardizes machine-to-machine communications and makes possible a range of “Industry 4.0” applications. Accelerating the flow of information across equipment and throughout the manufacturing process will improve the economics of manufacturing in all nations that foster the factory of the future. But when will these digital advancements start paying major dividends? And how can we prepare the workforce of the future to manage smarter machines? These difficult questions continue to loom even as the industry signals that we are the cusp of radical change in electronics manufacturing. 2) Ever growing interest in environmental issues and corporate social responsibility. While the U.S. government is currently focused on reducing the burden of regulation, the European Commission that recently took power in Brussels is pointed in the other direction, seeking ways to gain global competitive advantage with stricter environmental standards. Perhaps this environmental action in Europe explains nearly filled meeting of our revitalized Environment, Health and Safety (EHS) Committee. APEX EXPO attendees were also able to take advantage of sessions on California’s Prop 65 and lead-free electronics. But it’s not just regulation driving interest in environmental issues. IPC President and CEO John Mitchell’s keynote speech emphasized purpose-driven innovation, and that kind of innovation was well-represented on the floor. One company that caught my eye was Indubond, whose lamination press performs using 10 percent of the energy of traditional technologies. 3) New faces reflect IPC's commitment to the industry. A quartet of new IPC executives attended APEX EXPO for the first time, reflecting the association’s commitment to supporting the industry globally. Matt Kelly, formerly of IBM, joined IPC in January in the new role of chief technology officer. Matt’s mission will be to lead IPC’s “factory of the future” standards and technical research; develop a new “industry intelligence” function; and launch an Industry CTO Council. Shawn DuBravac is IPC’s new chief economist, expanding IPC’s research and member services around the economic trends shaping our industry. Alison James is IPC’s new senior director for Europe, working closely with IPC’s European members as well as European government officials, institutions and public policy stakeholders. And Kelly Scanlon is coming up on one year in the role of director of environment, health and safety policy and research. Please reach out to them if you have questions or suggestions. 4) IPC Education Foundation continues to expand its outreach. Last year, the new IPC Education Foundation hosted more than 100 San-Diego-area high school students at APEX EXPO for panel discussions, hands-on training in soldering PCBs, and tours of the expo floor. This year, IPCEF hosted almost 200 kids from area schools! In its second year, IPCEF is continuing to partner with several organizations to distribute basic electronics curricula to hundreds of high schools, and to create IPC student chapters at universities and community colleges across the country. 5) An influx of younger engineers is revitalizing our membership. IPC launched the Emerging Engineer program in 2016 to provide early-career professionals with an opportunity to learn from the dedicated industry volunteers who participate in IPC standards development. This year at APEX, they seemed to be everywhere. Younger professionals are also stepping into leadership roles in several key standards groups. And John Mitchell’s keynote speech highlighted the rise of millennials like Melby Thelakkaden of Raytheon, who has gotten herself involved in eight technical committees! 6) U.S. manufacturers see opportunities and challenges in defense electronics. The U.S. Defense Department is devoting increasing attention to the nation’s defense industrial base, including the electronics supply chain. Representatives of the DoD’s Industrial Base Analysis and Sustainment (IBAS) program attended APEX and focused on several key issues. Cyber security and resilience also played a prominent role in APEX discussions, with the DOD’s Cybersecurity Maturity Model Certification (CMMC) causing quite a few furrowed brows. IPC is stepping up its member support in these areas and exploring new platforms for industry engagement with DoD. 7) The Coronavirus outbreak is affecting our supply chain. One of the biggest headlines outside the convention center – the Coronavirus epidemic – was also felt inside the building, as attendees and exhibitor personnel from China stayed home due to the virulent outbreak in that country. People across the industry are worried about the human toll as well as the supply chain disruptions that could arise in this crisis and future crises. IPC is collecting data on the impact of the coronavirus on the industry. To share your insights, please reach out to Shawn DuBravac. These were my top take-aways from a government relations perspective, but it cannot be said enough: The power of IPC APEX EXPO lies in the thousands of attendees who take part in standards committees, policy committees, executive forums, technical conference sessions, and professional development. Many thanks to the hundreds of companies who exhibited their products and services and brought so much excitement to all aspects of the show.

By Mark Pritchard, director, media training Delta Group Electronics of Dallas, Texas hosted the production of a new IPC video on Wire Crimping, December 9-12, 2019. This is the sixth IPC video that Delta Group Electronics has hosted. Four of these videos have already won industry awards for video training. Safety in Electronics Assembly – Albuquerque, N.M. Wire Assembly Terminology Training – Rockledge, Fla. Electronic Assembly Inspection – Albuquerque, N.M. Reflow Soldering – Albuquerque, N.M. Handling in Electronics Assembly – Albuquerque, N.M. Founded in 1987, Delta Group Electronics Inc. is a full scope electronics contract manufacturer with five facilities — serving the southern portion of United States from coast to coast. More information can be found at www.deltagroupinc.com. “The pre-production planning and technical support for this video was exceptional,” according to Mark Pritchard, IPC video producer. “DGEI had everything laid out and ready to demo, along with the help of their top production staff. We felt completely welcome and supported, for which we are deeply grateful.” Participants in the video were: Damir Cocic, production manager; Flor Hernandez, engineering support; and Avelito Hernal, engineering. Flor Hernandez created all of the new wire-crimp samples that will be featured in this video and in the new IPC A-620 Certificate Course. Tod Cummins, DGEI/director of corporate quality, coordinated the production with Trey Johnson, general manager of the Dallas facility. Additional tools, equipment and samples were brought in by Jonathon Guay of Schleuniger. IPC sincerely appreciates this exceptional contribution to the educational efforts of our industry. Subscribe to our online video library: https://my.ipcedge.org/static/vtl.html for these and other training programs from IPC.

By Kunil Shah, Ph.D., chief scientist, LiloTree The advent and ongoing evolution of internet-enabled mobile devices has continued to drive innovation in the manufacturing and design of technology capable of high-frequency/high-density electronic signal transfer. The combined requirements for both fast, always-on data transmission, and small geometric form-factors can be difficult to satisfy without compromised performance and signal loss. Among the primary factors affecting the integrity of high frequency signals is the surface finish applied on PCB copper pads – a need commonly met by technology manufacturers through the electroless nickel immersion gold process, ENIG. However, a well-documented limitation of ENIG is its insertion loss due to the inferior conductivity of nickel over copper, leading to higher conductor losses. Additionally, nickel’s ferromagnetic properties adversely affect circuit performance. The result is an overall reduced performance in high-frequency data transfer rate for ENIG-applied electronics, compared to bare copper. The selection criteria of surface finish for 5G, high frequency, high density application involves minimal insertion loss, long shelf life, cost-effective and high reliability. There are few options (EPIG, EPAG, DIG, etc.) available in the market and there are limitations involved with each offering. You can learn more at IPC APEX EXPO Technical Conference Session 15 (Surface Finishes 1) on Wednesday, February 5 at 1:30-3:00 pm. For more information, visit www.ipcapexexpo.org.

By John Mitchell, IPC president and CEO The U.S. economy has remained surprisingly resilient, and the result has been that the country’s unemployment has continued to inch lower. It’s now at 3.5 percent, the lowest rate since 1969, and that rate could go even lower as the U.S. boasts more than 7 million job openings. Those job openings suggest an opportunity for workers but a tight labor market for employers. For the industry I represent, electronics manufacturing, talent and retention have always been top concerns, but the situation is worsening. Today, more than 60 percent of U.S. manufacturers say that an inability to find and retain skilled workers is constraining their growth and undermining their global competitiveness. The same story is true around the world. During my latest international listening tour of manufacturing plants in France, Germany, India, Japan, Taiwan and Thailand, I noted again that the challenges faced in the United States extend beyond our borders. The good news is that, through shared experience, we can develop shared insights and solutions. In that vein, I’d like to offer the conclusions I’ve drawn from my meetings with operators and managers across the electronics industry about the current labor environment: Lesson 1: An open-minded approach to hiring based on industry interest, not just skill, can result in new long-term talent During the recruitment process, seeking out potential employees that hold genuine interest and passion for the industry even if they don’t yet pose the skills can provide a new source to fill long-term workforce gaps. It’s okay to hire an employee with minimal training – that's where company education programs come in. In Japan, one manufacturing plant hires operators interested in the job without a background in the industry. The workers are trained with pay for a full year before joining the assembly line. Once thoroughly vetted and trained, operators have the avenue to move up through the ranks to become managers. Among the factory managers with whom I spoke, none of them had college-level training; their education was solely completed through intracompany training. As an added bonus the longevity and loyalty of this workforce is impressive, but more on that in Lesson 3. This model, used in some Japanese companies as well as others in Europe, underscores the point that we can find talent by embracing workers with little to no experience – but with industry passion – to build the worker pipeline. That is where the next key lesson comes in. Lesson 2: Career progression is important to workers Hiring is the first step, but companies need to keep thinking of new ways to keep employees engaged and motivated by prioritizing both their personal and professional growth. Job security and location to home remain pillars for workers within the industry. However, with a younger generation entering the workforce, convenience isn’t enough to retain workers. Workers want to know they have a career path they can build in their companies. In Thailand, operators who lack a college education, along with management staff from top schools, can grow within their roles and continuously be promoted. The job culture there exposes workers early on to self-improvement paths that help them attain specific knowledge or capabilities. Having this type of transparency helps create trust among employees and companies, where the workers invest in the companies and the companies invest in the workers. During my latest trip, I spoke with college-educated engineers who expressed appreciation for their companies’ focus on personal growth. One manager emphasized that it was during his time as a quality engineer that he learned how to meet his goals and prioritize learning additional skill areas, allowing him to become a senior production manager. Lesson 3: Worker retention relies on effective workplace communication to maintain worker happiness As I engage with workers and management, I’m always reminded that companies address and troubleshoot challenges in the workplace in a variety of ways, and how they do so impacts the employee experience. A successful environment champions collaboration to lessen the stress placed upon employees closest to the supply chain or any other production issues at hand. In Bangalore, India, I saw how deliberate and collaborative employee interaction could solve product processing challenges. For more arduous job tasks, such as accommodating factory capacity, maintaining various product delivery schedules and facilitating cross-department collaboration, a company systemized procedure review. When they encounter an issue, operators stop the production process, brainstorm solutions, bring these potential solutions to a quality assurance team and then implement the changes through a management system in place, fostering a new type of learning environment with its people and collaborative problem-solving at the core. The success this brings isn’t just apparent through workers’ happiness and loyalty – their mantra of “zero defects,” helps ensure their products demonstrate the highest quality standards through their production process. Conclusion: Lessons can be learned on a global stage to ensure company efficiencies and worker satisfaction for future growth Seven million jobs unfilled is a staggering number, but U.S. economic growth and innovation hinges upon addressing this workforce need. Companies are stepping up through commitments to hire interested but untrained workers, employee initiatives geared toward career progression, and c-suite focus on finding ways to retain workers. These initiatives are helping to drive record growth in the electronics industry. But the U.S. industry should take note of the lessons I saw around the world. For too long, countries have been resistant to learn lessons from others. But with our ever-shrinking globe and ever-expanding workforce, our neighbors have solutions that should be embraced.

In a win for U.S. taxpayers, defense readiness, and the electronics industry supply chain, the U.S. House and Senate are poised this week to approve a defense spending bill that includes $5 million for research and development on the issues surrounding lead-free electronics in mission-critical applications. IPC and dozens of its members and allies supported the request for these funds, which are included in the final version of the Fiscal 2020 defense appropriations bill, being voted upon in the U.S. Senate today. The House has already approved the spending package, and President Trump is expected to sign the measure within hours after its passage. Over the last 15 years, the commercial electronics industry has largely phased out its use of lead (Pb) in the manufacture of electronic components and circuit assemblies, due to government regulations driven by lead’s harmful effects on human health and the environment. However, the aerospace, defense and high-performance (ADHP) electronics sectors have secured exceptions to these restrictions because there is not enough data to guarantee the reliability of lead-free components in ADHP applications. The lead-free gap between commercial and defense electronics will only grow as lead-free becomes more entrenched in cutting-edge commercial technologies, and as governments – especially the European Commission – seek even more stringent rules on the use of lead. “The migration of the commercial industry to lead-free electronics has introduced technical and supply-chain concerns in the aerospace, defense and high-performance sectors that can only be addressed through greater, more focused public-private R&D,” said Chris Mitchell, IPC vice president of global government relations. “The funds in this bill will help support the much-needed collective effort and help ensure that mission-critical systems have full access to cutting-edge electronics from a robust global supply chain.” “Together with our partners in the Pb-Free Electronics Risk Management (PERM) Council, IPC will continue to advocate for a proactive, long-term approach to this issue,” Mitchell added. IPC and its partners believe that a five-year, $40 million investment in a public-private R&D program would yield more than $100 million in U.S. defense savings per year and improve military readiness and overall innovation. For more information, read this IPC Blog from April 2019.

By Chris Mitchell, vice president, global government relations In a win for U.S. taxpayers, defense readiness, and the electronics industry supply chain, the U.S. House and Senate are poised this week to approve a defense spending bill that includes $5 million for research and development on the issues surrounding lead-free electronics in mission-critical applications. President Trump is expected to sign the measure within hours after its passage. IPC and nearly 30 of its members and allies lobbied for these funds, which are “seed money” for a longer-term R&D effort. The need for these funds may be unfamiliar to the general public, but for the aerospace and defense industries, especially, this is a big deal. Over the last 15 years, the commercial electronics industry has largely phased out its use of lead (Pb) in the manufacture of electronic components and circuit assemblies, due to lead’s harmful effects on human health and the environment. However, the aerospace, defense and high-performance (ADHP) electronics sectors have been reluctant to migrate to lead-free because there is not enough data on the reliability of lead-free components in such applications. The lead-free gap between commercial and defense electronics will only grow as lead-free becomes more entrenched in cutting-edge commercial technologies, and as governments – especially the European Commission – seek even more stringent rules on the use of lead. IPC believes a five-year, $40 million investment in a public-private R&D program would yield more than $100 million in U.S. defense savings per year and improve military readiness and overall innovation. Together with our partners in the Pb-Free Electronics Risk Management (PERM) Council, comprised of experts from government, industry, academia, and other stakeholders, IPC will continue to advocate for a robust, long-term approach to this issue. Read our April 2019 blog for even more background, and watch this space and IPC.org for updates.

By Chris Mitchell, vice president, global government relations On Friday, December 13, the United States and China announced they had struck a “phase one” deal that effectively pauses the trade war that has flared between the countries over the last two years. The Trump administration says the deal “requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.” It also obligates China to make substantial purchases of U.S. goods and services and establishes a stronger dispute resolution process. In response, the U.S. has postponed new tariffs that were scheduled to go into effect on December 15 and cut the tariff rates on the most recent previous round. To learn more, check out the fact sheet produced by the U.S. Trade Representative. IPC welcomed news of the “phase one” deal. As documented in a recent IPC study, many IPC members are feeling the pain of higher costs, supply chain disruptions, administrative hassles, and reduced access to valuable markets as a result of the U.S.-China trade war. IPC urged both countries to de-escalate the tensions, suspend the tariffs, and address longstanding disputes through both bilateral negotiations and multilateral dispute-settlement mechanisms. With this context in mind, here are our top takeaways from last Friday’s announcement: 1. Much remains unclear about the substance of the deal. The text of the agreement won’t be released or signed until January at the earliest. Some critics have suggested that this announcement, like some before, may have been premature given the divergent manner in which U.S. and Chinese officials have characterized the deal. 2. China’s “structural reforms” largely reflect previously announced or enacted commitments. For example, China approved a new foreign investment regime outlawing forced technology transfer earlier this year. It was also months ago when it announced an opening of its financial services sector to spur new foreign investment; and it already pledged new currency commitments at the most recent G-20 summit. Even its intellectual property obligations are strikingly like IP regulations that have been in effect for a year. 3. We know too little about the agreement’s dispute-settlement provisions, which are key to ensuring that each party lives up to its commitments. The USTR says the agreement allows “the parties to resolve disputes in a fair and expeditious manner” and to take “proportionate responsive actions” they deem appropriate. This language sounds promising, but the devil is in the details. 4. China commits to step up its purchase of U.S. goods and services. Under the deal, China has agreed to import $200 billion more in U.S. goods and services over the next two years than it did in 2017. The agriculture sector is the largest single beneficiary; it expects China to purchase $32 billion more in goods and produce through 2021, though China has pushed back on including specific amounts for these purchases. The impact of these purchases on the electronics industry remains unclear. China’s commitment on this issue reflects President Trump’s emphasis on the bilateral trade balance. 5. The U.S. retained 25% tariffs on $250 billion in Chinese imports while canceling tariff hikes scheduled for December. The remaining tariffs disproportionately impact the electronics supply chain, so U.S. electronics manufacturers who import parts, components and materials from China won’t see much immediate relief. However, the tariffs instituted as part of list 4a have been cut from 15% to 7.5%. On the other hand, U.S. original equipment manufacturers dodged a bullet because the new tariffs that were scheduled to go into effect this week would have hit cell phones, laptops, and toys ahead during the holiday season. These products are largely engineered and designed in the U.S. but manufactured in China. For its part, China has agreed to forego new retaliatory duties including those slated for U.S. autos and auto parts. 6. It is not clear if or when negotiations on a “phase two” deal will commence. Initially, the Trump administration suggested that no date had been set but that they wouldn’t begin until after the President’s reelection. However, over the weekend, President Trump tweeted that negotiations would begin right away. The first order of business is finalizing and implementing the phase one deal, including the enforcement mechanisms. Many observers believe that as long as the phase one agreement is finalized in January and the Chinese appear to stand behind their new commitments, additional tariffs are not likely to be imposed in 2020. 7. Both the U.S. and China claim initial victory in a trade war that continues to inflict harm on both countries. The trade war has sapped growth from both economies, and the next round would have hurt both sides even more, so each had reason to strike a deal. In this phase one deal, China gave up very little, but President Trump has kept most tariffs in place and has accelerated the diversification of U.S. supply chains away from China. Meanwhile, he gives the economy more positive news going into an election year. We at IPC will continue to monitor and report on developments associated with this trade deal, but please don’t hesitate to contact us if we can provide you more information about the impact of this deal on the electronics industry.

The following statement can be attributed to John Mitchell, IPC president and CEO: “The electronics manufacturing industry welcomes the announcement that the United States and China have agreed to a "phase one" trade deal bolstering enforcement of China's intellectual property laws and rolling back or postponing retaliatory tariffs on thousands of goods traded between them. “As documented in a recent IPC study, many IPC members are feeling the pain of higher costs, supply chain disruptions, administrative hassles, and reduced access to valuable markets as a result of the U.S.-China trade war. “We call on the governments of the United States and China to de-escalate the tariffs on both sides; focus on results at the negotiating table and conclude agreements that address long-standing issues of concern to both sides. We also call on all members of the World Trade Organization to restore that body’s ability to play its role as arbiter of international trade disputes, so that nations won’t feel a need to resort to tariffs to resolve disputes.”

To determine the effects the U.S./China tariff dispute has on U.S. electronics manufacturers, IPC conducted a survey of its U.S. members. The results reflect how difficult it is for a global industry to navigate this uncertainty. IPC President and CEO John Mitchell provides details in his monthly IPC president's message. https://youtu.be/hiLojHk6I7A

Representatives of electronics companies from across Europe gathered last week in Brussels to call on European policy makers to ensure the right policy and regulatory environment to stimulate innovation in the electronics value chain and boost its competitiveness in Europe. Held annually, IMPACT Europe is our premier annual advocacy event in Brussels, giving IPC members the opportunity to engage directly with policy makers on key policy and legislative initiatives affecting their business. This year’s discussions focused on some of the most pressing challenges for the electronics industry: the future of EU industrial policy; planned changes to chemicals rules; expected activity on responsible sourcing of minerals; ongoing interest in addressing the skills gap; and new priorities in the area of international trade. The event kicked off with a private roundtable and a reception at the European Parliament, where IPC members had the opportunity to speak with Members of the European Parliament Łukasz Kohut (Poland) and Dragoș Pîslaru (Romania) about the upcoming renewed Industrial Policy and Skills Agenda, both expected to be published by the Commission in March 2020. Attendees also heard from the Senior Policy Advisor of the Renew Europe group Joost Hermans about upcoming priorities in international trade, including the defense of multilateralism, the need for an agreement on digital trade, and the group’s support for ensuring that human rights and environmental provisions in free trade agreements are enforceable. IPC’s policy priorities for the new legislative term were shared by IPC CEO and President John Mitchell, as well as Carsten Salewski of Viscom and Chair of IPC’s European Government Relations Committee. The next day started with a panel discussion on EU chemicals policy. Kelly Scanlon, IPC’s EHS policy and research director, highlighted the association’s investments in data collection and research to inform policy making. Two representatives of the European Commission – Elena Montani of its environmental department (DG Environment) and Gert Roebben of its industry and small business department (DG GROW) – discussed the much-anticipated European Green Deal and underscored the need for science-based rules and definitions, innovative financial schemes, public-private knowledge sharing, and educational initiatives. Raj Takhar of Assent Compliance gave the participants a sneak preview of a forthcoming IPC report on supply chain traceability regarding substances of concern. The report explores the need for a more holistic and consistent approach to identifying and reporting on chemicals use. Felicia Stoica of DG GROW’s Advanced Engineering and Manufacturing Systems Unit then gave a keynote speech on the Commission’s plan to renew its over-arching industrial policy. The EU industrial policy is wide-ranging, covering trade, support for small and medium-sized enterprises, investment, innovation and public procurement; it is also intended to become an enabler for the European Green Deal. Convergence and synergies with the EU digital policy will also be maximized, including links to cybersecurity and artificial intelligence. IPC representatives stressed that every link in the European electronics manufacturing chain is fundamental building block in every EU industrial priority, and as such the industry’s strategic significance should be recognized and incorporated into planning. During the last session, Zora Mincheva of the Commission’s DG TRADE presented the status of implementation of the EU Conflict Minerals Regulation. Chris Mitchell, IPC’s vice president of global government relations, shared two exciting developments at IPC on this issue. First, balloting was recently completed on revisions to IPC-1755, a data exchange standard; and earlier this year, IPC joined the European Partnership for Responsible Minerals (EPRM) as part of its continuing efforts to help IPC members navigate the complex challenge of responsible minerals sourcing. Julian Lageard of Intel and Ken Matthysen of International Peace and Information Service (IPIS) provided an update on the status of EPRM from the perspectives of supply chain actors and civil society. Participating member companies included Apple, Assent Compliance, BAE Systems, Continental, Dell Technologies, MED-EL Elektromedizinische Geraete Gesellschaft, IBM, Intel Corporation, Panasonic, u-blox, and Viscom. To all who participated, thank you for your active engagement and for helping to make this event a success! We will be in touch with follow-up activities. To those of you who missed this opportunity but would like to learn more or become involved in IPC’s EU advocacy efforts, please contact Alison James, IPC’s senior director, Europe at AlisonJames@ipc.org. View the photo galleries from IMPACT Europe Day One and Day Two.