Chris Mitchell
Vice President, Global Government Relations

The Headlines at a Glance: 

TOP NEWS OF THE WEEK 

• CHIPS Office Plans $500M Investment in Electronics Ecosystem

QUOTE OF THE WEEK 

• How the DC Budget Deadlock Hinders Defense Electronics

UNITED STATES

• Take A Minute to Help Us on PCB Funding
• U.S. Budget Stalemate Crimps Defense Electronics
• Electronics Manufacturing Concerns Raised in TSCA Hearing
• Bipartisan Tax Agreement Would Aid Electronics Manufacturers

EUROPEAN UNION

• European Commission Publishes Guidance Document For “First-of-a-Kind” Facilities
• IPC Offers Insights on Advanced Materials to European Commission
• European Commission Heightens Focus on Economic Security
• Industrial Strategy Remains Priority as Belgium Assumes EU Presidency

TRADE AND SUPPLY CHAIN

• Is Mexico Overtaking China Through Nearshoring?

UPCOMING EVENTS

• WHMA Global Leadership Summit, Feb. 13-15
• Unlocking Funding for IPC’s Registered Apprentice Program: Electronics Manufacturing, Feb. 21
• IPC APEX EXPO 2024, April 6-11

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TOP NEWS OF THE WEEK

CHIPS Office Plans $500M Investment in Electronics Ecosystem: In an encouraging development, the U.S. National Institute of Standards and Technology’s CHIPS R&D Office has issued two Notices of Intent (NOI) with a combined value of $500 million in areas relevant to the electronics manufacturing ecosystem. IPC applauds the commitment of at least $200 million to establish a “digital twin institute,” aimed at leading the world in transforming semiconductor and advanced packaging manufacturing. An additional $300 million for the National Advanced Packaging Manufacturing Program is another step towards cementing U.S. domestic capacity for advanced packaging substrates and materials, as well as workforce training programs to ensure that new processes and tools are capably staffed. These NOI are responsive to IPC's advocacy for a comprehensive, “silicon-to-systems” approach to electronics manufacturing beyond just semiconductor chips. IPC Contact: Rich Cappetto.

QUOTE OF THE WEEK

“What many in Washington may not realize is that for more than two decades, U.S. domestic PCB fabrication capabilities have atrophied. In recent years, a confluence of factors has set the stage for the industry’s revitalization, but the government isn’t doing its part. To achieve that renaissance and mitigate those national security threats, the Pentagon needs timely and robust funding under the Defense Production Act to ensure that the much-needed investments are made”  – Chris Mitchell, IPC Vice President of Global Government Relations, on how the budget deadlock in Washington hinders advancements in defense electronics. Read more on the IPC Blog.

UNITED STATES

Take A Minute to Help Us on PCB Funding: IPC urgently needs your help to ensure that funding for the Printed Circuit Board (PCB) industry — deemed a critical defense industrial base under the Defense Production Act (DPA) — is not reduced in the upcoming Fiscal Year 2024 budget. IPC and the PCBAA successfully advocated for a 2023 Presidential Determination that qualifies the PCB sector for DPA investment. Now, as Congress prepares to settle the full-year budget by March 8, we’re asking our members to add their voice by signing IPC’s letter to Congressional leaders. This funding is vital for sustaining U.S. competitiveness and supply chain security in PCBs and for the success of broader strategic investments like those under the CHIPS and Science Act. Please sign the letter here by Monday, February 5 at 12:00 Noon EST to support our industry. IPC Contact: Rich Cappetto.

U.S. Budget Stalemate Crimps Defense Electronics: The U.S. government's inability to pass a full-year budget for Fiscal Year 2024 is putting critical defense electronics initiatives on hold, reports IPC’s Chris Mitchell. The prolonged reliance on temporary funding measures has stalled vital projects for strengthening the domestic printed circuit board industry, deemed essential for national security. Despite bipartisan recognition of the sector's strategic significance and the potential for its rejuvenation, the Department of Defense has been forced to delay further investments while it awaits funding decisions in Congress. Read more on the IPC Blog.IPC Contact: Chris Mitchell.

Electronics Manufacturing Concerns Raised in TSCA Hearing: On January 24, the U.S. Senate Committee on Environment and Public Works conducted a hearing on implementation of the Toxic Substances Control Act (TSCA), including issues of relevance to electronics manufacturing. Dr. Michal Freedhoff of the Office of Chemical Safety and Pollution Prevention at the U.S. Environmental Protection Agency addressed a series of questions regarding, the handling of PFAS chemicals crucial to semiconductor manufacturing and defense applications. Throughout the hearing, the interplay between TSCA compliance and the necessities of the electronics sector was emphasized, particularly as it relates to semiconductor production, the push for domestic manufacturing, and national security concerns. As IPC’s advocacy team monitors the developments in this election year, TSCA’s trajectory remains a key policy issue. IPC Contact: Kelly Scanlon.

Bipartisan Tax Agreement Would Aid Electronics Manufacturers: The U.S. House and Senate tax-writing committees have reached a bipartisan agreement with significant implications for electronics manufacturers. The deal, if enacted, would permit immediate expensing of domestic research and development costs retroactively from January 1, 2022, to December 31, 2025, replacing the five-year amortization span and potentially reducing the tax burden on recent and ongoing innovations. It also would maintain deductions for depreciation through 2024 and 2025 and extend 100% bonus depreciation on new machinery, equipment, and vehicle investments until 2025, facilitating capital expansion plans. Moreover, the agreement would alleviate international tax complications by abolishing double taxation for entities operating in both the U.S. and Taiwan. IPC Contact: Rich Cappetto.

EUROPEAN UNION

European Commission Publishes Guidance Document For “First-of-a-Kind” Facilities: This week the European Commission published a guidance document on the application process for “first-of-a-kind” facilities to request the status of integrated production facility and/or open EU foundry, under the second Pillar of the European Chips Act. “First-of-a-kind” facilities are new or upgraded semiconductor manufacturing facilities providing a dimension of innovation not yet present in the EU market. The guidance aims to support undertakings to navigate the application process to gain the status of IPF and OEF, to understand the eligibility criteria, and to prepare the supporting documents needed to apply. IPC Contact: Alison James.

IPC Offers Insights on Advanced Materials to European Commission: In early January, IPC played a pivotal role in guiding the European Commission on the nuanced requirements of the electronics sector concerning advanced materials. With an eye on issuing a comprehensive Communication on Advanced Materials in 2024, the Commission engaged with prominent industry stakeholders for their insights. IPC's submissions emphasized the critical importance of adopting a holistic “silicon-to-systems" framework for the evaluation of electronic materials. Read more in our blog post. IPC Contact:  Alison James.

European Commission Heightens Focus on Economic Security: The European Commission is intensifying its focus on economic security amidst growing geopolitical tensions and technological shifts. In a recent proposal, the Commission introduced five initiatives building upon its initial concepts first presented in June 2023. These initiatives seek to enhance economic security by revising the Regulation on the screening of Foreign Direct Investment, issuing White Papers on export controls, outbound investment, and dual-use research. Additionally, a proposal for a Council Recommendation on research security is included. Striking a balance between Member State competency and the necessity for European cooperation, trade openness, and investment, the proposals align with the evolving EU approach to “de-risking.” The package follows the October 2023 recommended risk assessments on critical technologies, and further details are anticipated in February 2024. Read more on the European Commission website. IPC Contact: Alison James.

Industrial Strategy Remains Priority as Belgium Assumes EU Presidency: Belgium has assumed the Presidency of the Council of the European Union for the first half of 2024, and industrial competitiveness will continue to be an essential theme. Under its mandate in the Council, the Belgian Presidency will address topics including economic security, reducing harmful dependencies, and promoting critical technologies. With 2024 as a year of political change in the European Union, IPC will be continuing to work with the EU Institutions to highlight the critical importance of bolstering Europe’s electronics manufacturing ecosystem from “silicon to systems.” Read more about the priorities of the Belgian presidency of the Council of the European Union. IPC Contact: Alison James.

TRADE AND SUPPLY CHAIN

Is Mexico Overtaking China Through Nearshoring? Amid rising geopolitical and trade challenges, nearshoring is gaining traction as companies seek to bring production closer to consumer markets, writes IPC Chief Economist Shawn Dubravac the newest edition of IPC Community magazine. Mexico is emerging as a key industrial hub, surpassing China as the U.S.'s top trading partner. In 2023, Mexico's foreign direct investment soared, particularly from U.S. firms in the automotive and computer manufacturing industries. As China's share of U.S. imports is falling, Mexico and other Asian nations are on the rise, revealing a shift towards diversified supply sources. The shift is also seen in Europe, where Eastern European countries are becoming locations for enhanced supply chain resilience and sustainability. Read this story and more in the latest issue of IPC Community IPC Contact: Shawn DuBravac.

WHMA Annual Global Leadership Summit: Myrtle Beach, S.C., Feb. 13-15. Formerly the WHMA Annual Conference, the WHMA's Annual Global Leadership Summit is a networking event for executives representing wire harness manufacturers, OEMs, and suppliers for companies that build wiring harnesses and cable assemblies. Register today!

Unlocking Funding for IPC’s Registered Apprentice Program: Electronics Manufacturing: Webinar, Feb. 21, 11:00 am – 12:00 Noon CST. Learn about the funding landscape for IPC's registered apprentice program. This is for the electronics industry and IPC members who seek to improve their workforce training but are hindered by workforce development costs, specifically as it relates to apprenticeship. Register today!

IPC APEX EXPO 2024: Anaheim, Calif., April 6-11. The largest electronics manufacturing event in North America, APEX features the newest innovations and the best minds in the industry. APEX 2024 will also host the Electronic Circuits World Convention 16, an international PCB symposium held every three years, featuring the latest information on global PCB demand, PCB manufacturing processes, and promoting the domestic PCB industry in every country and every region. Register by March 1 for a 20% discount!

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The U.S. Congress's glacial pace on finalizing appropriations bills for FY24 is creating headaches for programs of importance to the electronics industry. For example, the Dept of Defense can’t spend money it doesn’t have, so it must delay efforts of critical importance such as strengthening the nation’s electronics manufacturing base. On behalf of electronics manufacturers, IPC urges Congress to act soon and with great ambition to strengthen the domestic electronics industry beyond just semiconductor chips. Our industry’s strength is directly tied to U.S. innovation, security, and economic competitiveness, and the U.S. can’t risk falling further behind in global competition.		Exciting to see this highly anticipated step come to fruition. IPC has led the way in calling for USG investment to build a domestic advanced packaging ecosystem. The investments in research, development, production and workforce education and training announced by this Notice of Intent, represent a step in the right direction. Kudos to the CHIPS R&D Office for this major milestone. IPC will continue to push for the complete Silicon to Systems manufacturing ecosystem. A secure supply chain includes robust advanced packaging, substrate fabrication, PCB fabrication, PCB assembly, and electronics assembly.

KEEP IN TOUCH WITH US 

Meet the IPC GR Team: Whether it is engaging with policymakers in the Americas, the European Union, or Asia, the IPC Government Relations (GR) Team proactively seeks opportunities to educate, inform and influence policymakers on policies that spur innovation, growth and competition, while protecting human health and the environment. But our success depends on your support and engagement. Learn more and get involved in IPC advocacy today! IPC Contact: Chris Mitchell.   

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