As an industry-driven association, IPC exists to help its member companies innovate, compete, and succeed in the electronics industry. Effective government relations is crucial to our collective success, because many of the policy debates taking place in world capitals have wide-reaching impacts on our industry. That’s why senior executives from top electronics companies recently gathered for “IMPACT Washington, D.C. 2018” to advocate for a pro-growth, pro-electronics policy agenda. During the two-and-a-half-day event, member executives met with leaders of the Trump Administration and members of Congress to share their views on issues including strengthening the defense industrial base; ensuring a skilled workforce; and advancing free and fair trade. Participants met with leaders of the Trump Administration, including: • Andrew Wheeler, Deputy Administrator, Environmental Protection Agency; • Alexander Gray, Deputy Director, White House Office of Trade and Manufacturing; • Ian Steff, Deputy Assistant Secretary for Manufacturing, International Trade Administration; • Eric Chewning, Deputy Assistant Secretary, Office of Military Industrial Base Policy; • Chesley Dycus, Advisor for Defense, Office of the Vice President; • Rosemary Lahasky, Deputy Assistant Secretary, Employment and Training Administration, U.S. Department of Labor; and • Dr. Michael Wooten, Acting Asst. Secretary of Education, Career, Technical and Adult Education (CTE). On Capitol Hill, the group had 25 individual and group meetings with key policymakers, including: • Senator Mark Warner (D-VA); • Senator Lindsay Graham (R-SC); and • Senior staff of four major congressional committees. IPC also arranged for participants to meet one-on-one with their hometown congressional representatives to discuss the local implications of federal policy issues. Attendees had the benefit of background briefings on the political and economic trends that are driving events in DC, from former Congressman Tom Davis of Virginia; former chairman of the White House Council of Economic Advisers Douglas Holtz-Eakin; and top labor lawyer Maury Baskin. IPC also recognized two Senators with the IPC Government IMPACT Award. Senators Joe Donnelly (D-IN) and Todd Young (R-IN) were honored for their leadership roles in supporting a robust domestic electronics industrial base. The two senators serve on key congressional committees and represent the Defense Department’s Executive Agent for Printed Circuit and Interconnect Technology at the Naval Surface Warfare Center in Crane, Indiana – an office that is vitally important to our industry. To see photos of this year’s event, click here. To all who participated, thank you! Your active engagement has already been crucial in advancing our industry’s policy agenda. For example, The Senate FY2019 National Defense Authorization Act (NDAA) includes language that will assess the U.S. defense electronics industrial base and help establish long-term funding and policy direction for the Executive Agent at NSWC Crane. If you missed this opportunity and want to be in the loop on IPC’s government relations efforts going forward, please let us know. We have a robust agenda of follow-up activities, and your participation in those efforts would be welcomed and valuable. Stay tuned for more news from IPC government relations, and we’ll be looking forward to seeing you next year at IMPACT Washington, D.C. 2019!

Today, President Trump announced that he will impose 25 percent tariffs on Chinese imports worth roughly $50 billion. The tariffs, first proposed in April, are the result of a Section 301 investigation that found China’s technology transfer policies had harmed U.S. companies. The first round of these tariffs will take effect July 6 and will target more than 800 products at the heart of the Made in China 2015 initiative, including “industrially significant technologies.” These 800+ products are valued at $34 billion in trade value and come from industries like aerospace, robotics, and automobiles, but excludes most consumer purchased goods like televisions and cellphones. We encourage you to review this list as it includes many tariff codes that the electronics industry uses to import goods. In May, IPC sent a letter to the U.S. Trade Representative warning that the Section 301 action could harm U.S. manufacturers because the proposed tariffs primarily target the supply chains of U.S. companies that are least able to weather cost increases. Please continue to keep us informed about how these tariffs are affecting your businesses so we can align our advocacy goals accordingly. The Trump Administration plans to impose a second round of tariffs valued at $16 billion in trade that were not on the original list proposed in April. This second list will have to undergo public comment and review before being finalized. We will be studying the new list and its likely impact on the electronics industry. China has indicated that it plans to impose retaliatory tariffs in response to increased U.S. duties, and top U.S. trade officials have said the U.S. will respond in kind — raising concerns that a trade war may erupt unless the two countries can negotiate an agreement. U.S. and Chinese trade officials continue to negotiate. The Trump Administration has suggested the new tariffs are designed to ratchet up pressure on China to make concessions. To that end, the President has the flexibility to delay the duty increases up to 180 days depending upon progress in the negotiations. Earlier this year, the U.S. imposed steel and aluminum tariffs on most countries around the world including China. China has already responded with retaliatory tariffs as have other countries. Those tariffs are already being felt by U.S. manufacturers — including those within the electronics industry — that cannot source domestically the steel and aluminum they need. The Trump Administration is also planning to impose new investment restrictions and export controls against China that would curb Chinese acquisition of “industrially significant” technology. An announcement on these new controls is expected by June 30. Contact Chris Mitchell, IPC vice president of global government relations at ChrisMitchell@ipc.org for more information about today’s announcement.

Fueled by strong growth in electric vehicles and autonomous cars, and a dramatic increase in electronics content in conventional automobiles and trucks, automotive electronics are crucial components of engine, ignition, and transmission management; entertainment, navigation, diagnostic tools and safety systems. IPC has gathered thought leaders and subject matter experts from leading electronics and automotive companies to discuss the future of automotive electronics design and manufacturing at “IPC Automotive Electronics Reliability Forum,” June 4-5 in Nuremberg, Germany. Andreas Aal, semiconductor strategy and reliability expert at Volkswagen, will open up the forum on June 4 with his keynote, “Challenges of Using Advanced Package Technologies in Automotive Applications.” On June 5, Dr. Maxime Makarov, head of electro-physics at Groupe Renault, will discuss electronics reliability during his keynote, “On-Board Electronics Reliability: Assessing the Need to Revise Conventional Approaches.” During the two-day event, Aal and Makarov will be joined by other automotive and electronics industry technologists from, Continental Automotive, Robert Bosch GmbH, Infineon, Henkel, TTM Technologies, Atotech, MacDermid Enthone, IHS Markit and more, who will provide updates and technical content on such topics as: the automotive electronics market, surface finish and assembly material interactions affecting electronic system reliability and performance, future reliability challenges for new packages, challenges of semiconductor product qualification for extended automotive requirements, and design considerations of high reliability PCBs for high power automotive applications. “IPC’s Automotive Electronics Reliability Forum will allow attendees to build personal relationships with the innovators who are working on tomorrow’s electronics technologies as well as gain first-hand knowledge of the pioneering projects that are putting automotive electronics breakthroughs into practice,” said Philippe Léonard, IPC Europe director. “The forum is not solely about the automotive industry,” adds Léonard — “it’s about technologies, electronics market, thermal energy in PCBs, onboard electronics reliability, and much more. As the forum covers a wide breadth of relevant and timely topics, it is perfectly suited for engineers and technologists representing Transportation OEMs, Tier 1 systems providers, and assembly, printed circuit board and materials partners.” Speaker Laurent Coudurier, combustion team manager at Air Liquide concurs, "As reliability is a major driving force for automotive electronics, it is very beneficial to share developments coming from different industrial sectors involved in the supply chain and contributing to improve reliability of electronic assemblies for cars." For more information or to register for “IPC Automotive Electronics Reliability Forum,” visit www.ipc.org/Automotive-Reliability-Forum.

Today, May 11, IPC provided comments to the Office of the U.S. Trade Representative (USTR) on the domestic impact of proposed tariff rate increases on Chinese imports  May 11, 2018 The Honorable Robert Lighthizer U.S. Trade Representative Office of the United States Trade Representative 600 17th Street, NW Washington, DC 20508 RE: Proposed Determination of Action Pursuant to Section 301 (USTR-2018-0005) Dear Ambassador Lighthizer: IPC — Association Connecting Electronics Industries® appreciates the opportunity to provide comments on the domestic impact of proposed tariff rate increases on Chinese imports as proposed by the Office of the U.S. Trade Representative (USTR) in its Section 301 Determination of Action. IPC is a U.S.-headquartered, global trade association representing all facets of the $2 trillion electronics industry. We are the definitive authority for industry standards, training, market research, and public policy advocacy. IPC has more than 4,300 members globally—2,300 of which are located in the United States. Our industry employs more than 2 million Americans, many of whom have coupled high school and post-secondary education with technical training to secure stable, well-salaried employment in advanced manufacturing. On behalf of these 2 million Americans, I write to register the electronics industry’s concerns about the imposition of increased duties on Chinese imports. IPC understands that the proposed tariff increases are intended to punish China for their technology transfer policies, and we share that concern and support alternative measures to address it. However, the proposed action will inflict significant and long-term harm on many small- and medium-sized U.S. electronics manufacturers that rely on Chinese materials, components and equipment to produce their products and compete in the global marketplace. Many of the proposed tariff increases will be felt deep within the electronics supply chain among industry segments known for their thin margins. The companies that survive in these segments—especially in the United States—do so by keeping costs down and responding nimbly to customer requirements. The proposed action will increase production costs, delay product deliveries, and disrupt supply chains, imperiling U.S. manufacturers and the jobs they provide. Instead, IPC encourages the USTR to pursue bilateral negotiation and multilateral trade remedies to address U.S. concerns with China’s technology transfer policies. Should the USTR decide to impose higher duties on Chinese imports, we implore you to exempt imports— including raw materials, components, and equipment—that cannot be easily sourced outside China but that are critical to U.S. manufacturing. The Interconnected, Global Electronics Supply Chain The U.S. manufacturing industry has changed dramatically over the last 40 years. In 1980, the U.S. boasted close to 20 million manufacturing jobs. Today, that number is closer to 12 million even as the nation’s total workforce has grown. The U.S. electronics industry has been especially hard hit. Thin margins led companies to seek low-cost production facilities outside the U.S., primarily in China. As electronics manufacturing grew in China, so did the supply chain ecosystem to sustain it. Conversely, in the U.S., the supply chain eroded, leaving major gaps in the industrial base. These gaps are ever-present for U.S. electronics manufacturers. Their survival depends upon meeting customer requirements by outperforming their foreign competitors and by accessing an interconnected, global electronics supply chain. The domestic supply chain cannot fully satisfy the many and diverse needs of U.S. manufacturers, most of whom are now geared towards specialized, low-volume production. A large enough market does not exist to support a robust domestic supply chain. IPC is optimistic that advanced manufacturing and a rising desire for smart sourcing will continue to grow U.S. manufacturing, but that long-term growth will be undermined by the short-term harm done by the proposed tariffs. Increased Tariffs Will Harm U.S. Electronics Manufacturers In response to the USTR’s proposed Determination of Action, IPC conducted a survey of its U.S. membership, and the results suggest that many U.S. firms will be negatively impacted by increased tariffs on Chinese imports. Of the respondents, 87% import raw materials, components and/or equipment from China. These importers are diverse in size and market segment, representing a cross-section of IPC’s membership. The respondents collectively have production facilities in 36 U.S. states, with the highest concentration of facilities in California followed by Minnesota, Texas, Illinois, and Wisconsin. The respondents were asked to rate the effect of these tariffs on their businesses on a scale of 0 (no impact) to 100 (threat to survival). More than one-third of respondents (35 percent) said the impact would be severe and could endanger their companies, further shrinking the U.S. electronics industry. About one-quarter (23 percent) predicted a moderate impact, and 42 percent indicated the negative impacts would be minimal. Of those companies that rated the impact low, many expressed confidence that they could restructure their supply chain and pass costs along to their customers. A few believed the tariffs would help their businesses. Those companies rating the impact higher were not so optimistic. Consider the case of one respondent: a small- and medium-sized manufacturer of printed circuit board assemblies and critical electronic systems for customers in the industrial, aerospace, defense, automotive and medical industries. The company has three manufacturing facilities located in Texas, Wisconsin and Mexico. This firm exemplifies the “reshoring” movement in the U.S. In this low-margin business, the company operates leanly and with a laser focus on its competitive advantage: low volume, high complexity manufacturing to allow customers to source electronics in the region where they are sold. This company has been a success story by revolutionizing, not only how we manufacture, but how we think about the total landed cost of ownership through the entire manufacturing production lifecycle and supply chain. On the 0-to-100 scale mentioned above, this company estimates the negative impact of the proposed tariff increases at 70. In 2017, the company spent more than $2 million on manufacturing equipment, including equipment listed in the proposed Determination of Action. The most costly items were an automatic electronic component placement machine (84798992) and industrial furnace (85143010). Increasing tariffs on these products only increases the company’s cost of production before it has even procured base materials. This company’s concerns were echoed by others in the industry. Attached to this submission is a list of the tariff codes our members use, but I would like to highlight the five tariff codes that 50 percent or more of respondents indicated they use to import goods from China. None of these imports are finished goods. They are all critical in the manufacture of components and end items, and they are all difficult to source domestically. Other tariff codes also relate to electronics manufacturing equipment and parts, including 84561170, 84561270, 84669396, 84798992, 84804100, and 85143010. Respondents also expressed concern that the tariff increases would increase the cost of base materials to produce high-reliability electronics. Higher prices will depress demand among customers and will make U.S. manufacturers less competitive in the global marketplace. Another respondent also suggested the tariffs will create cost confusion in the marketplace and impose new administrative burdens as inventoried goods are mixed with newly imported goods. These concerns led one respondent to offer the admonition: “Don’t do this.” Conclusion IPC appreciates the U.S. Government’s heightened attention to intellectual property theft. As an industry association, IPC has sought to introduce tools, including industry-developed standards and best-practices, to help companies safeguard their intellectual property and that of their customers. Nevertheless, intellectual property theft remains a rampant problem globally. We support efforts among governments to secure binding and cooperative agreements to reduce intellectual property theft. As we work to address intellectual property issues, we must not further undermine U.S. companies by imposing increased costs on them. Doing so will only weaken their competitiveness in the global economy and jeopardize their long-term sustainability at a time when the U.S. Government should be taking active measure to shore up the industrial base. Instead, IPC encourages the USTR to postpone new tariffs and prioritize bilateral negotiations with your Chinese counterparts and the pursuance of remedies under existing trade agreements. Thank you again for the opportunity to comment on this proposed Determination of Action. If IPC can offer additional information or assistance, please contact Chris Mitchell, IPC vice president of global government relations, at ChrisMitchell@ipc.org or 202-661-8097. Sincerely, John Mitchell President and CEO

Your presence is needed in Washington, D.C. Hearing from constituents like you, whose businesses are affected by their decisions, can have a significant impact upon policymakers. The more executives our industry can rally, the stronger our collective voice will be and the more likely we will have a positive impact. You can register for IMPACT at www.ipc.org/IMPACT-2018. This event is a unique opportunity to join your industry peers and advocate on behalf of the electronics manufacturing industry for policy issues that can affect the way your company does business. During this two-and-a-half-day event you will: • Collaborate with industry executives who share your commitment to the industry; • Learn more about the policy issues we face and deliver research-based positions and solutions to the U.S. Government; • Speak with leaders in Congress and the Administration in support of our common priorities; and • Address your company’s concerns and personal experiences. This year, we will be advocating on issues related to: • Regulatory reform; • Strengthening the electronics industry supply chain; and • Workforce and education https://www.youtube.com/watch?v=7SbwRxN4AWA

The European Union is currently working to update its legislation on export controls for dual-use items, meaning items that can be used for both civilian and military applications and/or can contribute to the proliferation of Weapons of Mass Destruction (WMD). Most importantly, the proposal for an updated Regulation introduces the following changes: • Expansion of list of dual-use items to include cyber-surveillance technologies and those that can be used for human rights violations. • Added obligation for exporters, when conducting their due diligence, to notify Member State authorities, if they suspect exported items not listed in the Regulation are used to violate human rights. • The European Commission is empowered to amend the list of dual-use items covered by the Regulation, so continuous monitoring of this process will be needed to ensure regulatory compliance. The new Regulation does not include any specific mentions of printed circuit boards, but is nevertheless a piece of legislation that IPC members must be aware of, as it could create possible regulatory compliance issues. With that in mind, IPC has drafted a briefing note detailing the new provisions introduced by the Regulation, as well as the state of play and next steps in the legislative process. The updated proposal is currently being discussed by representatives of the European Commission, Council and Parliament in informal “trilogues”. It is possible that the updated Regulation will have gone through the legislative process in the course of 2019. The more detailed briefing note on the new regulation on export controls on dual-use items can be found here: http://www.ipc.org/3.0_Industry/3.3_Gov_Relations/2018/Dual-Use-Export-Controls-Briefing.pdf. IPC members are invited to share their feedback on this document and any other thoughts and concerns they might have on export controls for dual-use items with Chris Mitchell, IPC’s vice president of global government relations, at ChrisMitchell@ipc.org.

IPC is seeking volunteers who represent all segments of the electronics manufacturing industry, for our Technical Education Program Committee, to help guide, create and develop high-quality educational programs through conferences, tutorials and workshops. This is a great opportunity to collaborate with your industry colleagues and to become more involved with IPC. For more information, contact Alicia Balonek, senior director of tradeshows and events, at AliciaBalonek@ipc.org.

Don Dupriest, Lockheed Martin Missiles & Fire Control, has been elected chair of the IPC Technical Activities Executive Committee (TAEC) for a two-year term. Dupriest succeeds Chris Mahanna of Robisan Laboratory, Inc., who held the role for IPC's top standards development oversight committee for the past two years. As a Lockheed Martin Fellow on Lockheed Martin’s Technical staff, Dupriest provides leadership in interconnect technology development for electronic manufacturing and is responsible for advanced technology, process development and product manufacturability for electronic systems. An active IPC volunteer for more than 25 years, Dupriest has provided invaluable service to IPC. A previous chair of the TAEC, he is also a member of IPC’s Hall of Fame and President’s Award recipient. Dupriest currently co-chairs the IPC D-35 Printed Board Storage and Handling Subcommittee. Dupriest was elected to the TAEC post while attending a mentorship meeting for IPC Emerging Engineers. “I have to admit I was surprised to hear I was elected – I guess this is what happens when you miss your first TAEC meeting in twenty plus years,” he joked. “The committee voted to change the rules to allow a second term.” Dupriest added, “I am honored to be chosen and trusted by my peers to lead and serve as the first second term chairman of the TAEC.” Citing his goals for chairmanship, Dupriest stated, “I typically jump right in when approaching any task, so I plan to do that with the TAEC. We now have greater use of task groups within committees to speed up creating content and resolution of requirements under development, but there is always room for improvement. “I’d like to see what else we can do to better execute standards development by revising the Project Initiation Number (PIN) process for each new document at IPC. I’d like the process to better describe potential influences on other general committees and documents; i.e., requirements that might be impacted by the new PIN, giving general chairs a broader idea of activities outside their purview that may be impacted by new document development. I am also interested in keeping the communication lines open between general chairs so that we keep one another informed.” Mentioning his commitment to mentoring the next generation of engineers, Dupriest indicated his interest in bringing emerging engineers to TAEC meetings to give them an idea of what to expect once they are members of IPC. For additional information on the IPC TAEC and its activities, visit www.ipc.org/TAEC.aspx.

It is with deep sadness that IPC announces the death of one of its valued committee members and leaders, Brian Butler, president and CEO of Introbotix, Corp. Brian passed away on March 11, 2018. Brian joined the IPC D-21c High Speed/High Frequency Controlled Impedance Task Group in early 2000. He volunteered for numerous IPC task groups dedicated to high speed/high frequency design, serving as chair of the IPC D-24a Characteristic Impedance Test Methods Task Group and vice chair of the IPC D-24d High Frequency Signal Loss Task Group. In doing so, Brian led numerous efforts to develop and revise IPC-TM-650 Test Methods for usage by printed board fabricators in these technology areas. His energy, enthusiasm and valuable contributions to the industry will be missed by many. On behalf of the electronics industry, IPC offers its condolences to Brian’s wife, Christine, their sons, Daniel and Ben, and Brian’s parents. A detailed obituary was posted by Christine, at http://www.tributes.com/obituary/show/Brian-Butler-105923501.

https://youtu.be/AMcZMMdMxEk IPC president and CEO John Mitchell discusses the skills gap in the manufacturing industry and IPC’s efforts to address the issue.