On March 27, US President Joe Biden signed a presidential determination (PD) authorizing the use of Defense Production Act (DPA) to support the PCB and advanced packaging industries in the United States
"The rapid changes occurring within the microelectronics industry make it imperative for the Department of Defense to ensure that this critical sector can support the nation's defense needs. The Presidential Determination will allow the DoD to use additional tools to ensure the resilience of American microelectronics manufacturing," said Anthony Di Stasio, Director of the Manufacturing Capability Expansion and Investment Prioritization (MCEIP) office, in an official US Department of Defense press release.
The announcement followed another presidential determination signed by Biden in early March that sought to authorize the use of DPA Title III authorities to build the US hypersonics industrial base. Specifically targeted are air-breathing engines, advanced avionics, guidance systems and constituent materials for hypersonic systems.
Both PCBs and hypersonics are focus areas in the US President's Executive Order 14017, "America's Supply Chains."
According to a 2022 study conducted by market research firm N.T. Information, the global PCB industry saw a total revenue of US$87 billion in 2021, with Taiwan-based manufacturers leading the market with a 32.8% share of global revenue, followed by China at 31.3%, Japan at 17.2%, and South Korea at 10.9%. The same study, however, also indicates that China has the largest number of PCB manufacturers with 69 companies in the sector, followed by Taiwan (27), Japan (23), and South Korea (14). The United States, according to the study, only has 5 PCB makers.
The Defense Production Act authorizes the US President to ensure the availability of domestic industry for defense, essential civilian, and homeland security requirements, while Title III authorities aim to reduce US dependence on foreign supply chains by working with the government and industry to identify areas where critical industrial capacity is lagging or non-existent.
Once an area is identified, the program engages with domestic companies to mitigate the risks via grants, subsidies, purchase or purchase commitments, and loans/loan guarantees. Apart from sustaining critical production, Title III priority areas also include the commercialization of R&D efforts and scaling emerging technologies.
In peacetime, all investments under DPA require a presidential determination. In the past three years, such presidential determinations were also used to cover sectors such as radiation-hardened and strategic radiation-hardened microelectronics, critical materials for battery production and small unmanned aerial systems.
