US Congress Introduces Legislation to Support America’s PCB Industry

WASHINGTON, DC – New bipartisan legislation introduced by US Representatives Blake Moore (R-UT) and Anna Eshoo (D-CA) encourages investment in a trusted, reliable domestic source of PCBs and substrates, and is generating plaudits from an industry association dedicated to building the domestic printed circuit board industry.

The Protecting Circuit Boards and Substrates Act of 2023 “finishes the job the Chips Act began by incentivizing investment in the domestic printed circuit board (PCB) industry,” said the Printed Circuit Board Association of America in a press release. The Chips Act passed by Congress last year allocates tens of billions of dollars in direct funding and tax incentives to promote US technological superiority in semiconductor manufacturing.

US PCB market share has shrunk over the past 20 years, falling from 30% in revenue terms to barely 4% of the world’s supply. Ninety percent of the world’s supply now comes from Asia, 56% from China.

Among the major provisions of the bill:

• $3 billion to fund factory construction, workforce development and R&D
• A 25% tax credit for purchasers of American-made PCBs and substrates

“Now is the moment for Congress to take decisive action by furthering robust legislation to reshore our manufacturing, strengthen our supply chains, and prioritize national security,” said Rep. Moore. “The Protecting Circuit Boards and Substrates Act provides a tried-and-true approach to incentivizing American companies to produce printed circuit boards here at home, which will maintain the integrity of military and national security commercial materials, boost our economy and workforce, and usher in a new era of American manufacturing. The progress we have made on semiconductors is a significant step in the right direction, but congressional support for the entire microelectronics ecosystem is needed to reduce reliance on China. I am grateful to reintroduce this bill with Congresswoman Eshoo and am hopeful this bipartisan effort will successfully move through the legislative process.”

“Printed circuit boards are critical components of almost every piece of electronics used today,” said Rep. Eshoo. “However, over the past two decades, a vast majority of PCB manufacturing has moved offshore, making PCBs vulnerable to tampering by foreign adversaries, and only 4% of PCBs are manufactured in the United States. If we want to ensure technological superiority across the global stage and strengthen national security, we need to bring PCB production back to America, which is exactly what my bipartisan bill does.”

“Remember, chips don’t float. They need PCBs to connect to any electronic device. With production of American-made semiconductors ramping up, PCBs are a key ingredient in revitalizing the nation’s microelectronics ecosystem. Without a robust domestic supply chain, we have become almost entirely reliant on foreign suppliers for the PCBs we need,” said Travis Kelly, chairman of the Printed Circuit Board Association of America.

Added PCBAA president Will Marsh, “Our industry is grateful for this bipartisan support for American-made microelectronics. This is the right response to years of offshoring and a dangerous dependence on foreign sourcing.”

PCBAA executive director David Schild said, “From F-35s to F-150s, the modern world is built on printed circuit boards, and we need to make more of them in America. This bill will lead to new factories, high paying jobs and an ecosystem to support the work being done by our colleagues in the semiconductor industry.”

ASKPCB Building New Thai Facility

YIYANG, CHINA – Chinese PCB fabricator ASKPCB is building a factory in Thailand that is expected to have a production capacity of 120,000 sq. m. and be capable of providing volume production of 28-layer PCBs in all fields, including data centers and next-generation switches.

The factory is being built in Thailand’s Rojana Ayutthaya Industrial Park, which is near Wus Group’s Thai factory and near the city center of Bangkok. With a land area of around 26.67 hectares, the Thailand factory is expected to commence trial production by the second quarter of 2024.

In an online investor briefing, the company said the primary goal of the Thailand factory is to address supply-chain security concerns of core customers, providing them with matched services across various domains, including servers, cars, communications, and consumer products. The factory is positioned to meet the rapidly expanding PCB demand in Thailand and surrounding Southeast Asian countries. In recent years, these countries have experienced rapid GDP growth and are following the path of China with a strong demand for PCBs and favorable order prices, ASKPCB said.

ASKPCB currently has two factories in China and has the capability to mass-produce various large-size and small-size boards related to servers with 18 or fewer layers, with capability to produce customizeorders of up to 28 layers in small batches. The testing boards can achieve more than 36 layers. The company’s total production capacity is approximately 760,000 sq. m. per month, with the monthly production capacity of its Hunan site 320,000 sq. m., and its Guangdong campus being 440,000 sq. m.

TPCA: Taiwan’s PCB Industry Creating New Cluster in Thailand

TAOYUAN CITY, TAIWAN – The Taiwanese PCB industry is increasingly investing in Southeast Asian countries – particularly Thailand – as customers look to secure their manufacturing bases against global uncertainties and move out of mainland China, according to the Taiwan Printed Circuit Association.

Currently, Taiwanese PCB manufacturers have more than 60% of their capacities in Mainland China and 37% in Taiwan, and for many years, Taiwanese companies have not valued the Southeast Asian countries because of their planning and management in Taiwan and mainland China. Since last year, however, international political instability and end-customers’ concern about supply-chain disruption have driven a worldwide trend to relocate the supply chain.

Thailand has the highest PCB output among Southeast Asian countries, and its open business environment with a high level of internationalization have made it the best choice for Taiwanese companies to base production factories at this time, TPCA said.

In the past two years, Taiwanese PCB companies such as Unimicron, Compeq, Wus Printed Circuit, Dynamic Electronics and Complex Micro Interconnections, along with suppliers of raw materials, such as Taiflex, TUC and ITEQ, have established factories in and around Bangkok. Several Chinese counterparts have also relocated factories to Southeast Asia, including Aoshikang Technology, Chian Eagle Electronic Technology, Jove PCB and FSQuality.

TPCA has organized two investment tours to Thailand, one investment tour to Vietnam and one to Malaysia, and on July 21, it will hold the Thailand PCB Industry Link Summit where the Thai government, Thai and Taiwanese PCB companies, and industry park representatives will be invited. This communication platform is meant to help those who want to invest in Thailand, and TPCA will work with the Thailand Printed Circuit Association to discuss the major issues relevant to how the PCB industry chain moves to Thailand.

AT&S Building New Research Center in Austria

LEOBEN, AUSTRIA – AT&S has received a €250 million loan ($271 million) from European Investment Bank to fund research and development activities and help finance the construction of a new research center at its headquarters here.

The new center in Leoben will help the European Union to achieve digital autonomy, a priority under the European Chips Act, and the goal is to create a chip ecosystem to ensure Europe’s security of supply in microchips and to strengthen its digital technology production capabilities, EIB said in a release.

“We are proud to support AT&S, a highly innovative company that is key to achieving digital autonomy in Europe,” said EIB vice president Thomas Östros, who oversees financing in Austria. “The Leoben research center, in collaboration with universities and research institutions, will serve to develop knowledge within the industry.”

“AT&S’s new R&D center will make a significant contribution to Europe’s competitiveness in the field of microelectronics, in line with the European Chips Act,” said AT&S CEO Andreas Gerstenmayer. “This center of expertise for IC substrates and microelectronics packaging being built in Austria is the only one of its kind in Europe. This investment will serve AT&S customers in the high-end semiconductor sector as well as international research institutions. It will be a major regional development project and create many appealing jobs.”

HDP Announces Launch of 3 New Projects

ROUND ROCK, TX – Following the successful completion of its spring member meeting, held in Santa Rosa, CA, in February, the High Density Packaging User Group has launched three new projects:

• Large Footprint BGA Warpage. PCB warpage is a common phenomenon due to material CTE mismatch, copper distribution, PCB processes, etc. For large BGA footprints (e.g., >75mm square), extra warpage on the PCB surface and package warpage have been creating significant challenges to SMT (solder joint issues) due to the flatness mismatch between the PCB surface and package. This project focuses on flatness within the BGA footprint that is impacting assembly with the aim of defining a sustainable and achievable BGA flatness guideline.
• Permittivity of Cooling Liquids. It is well known that immersion cooling liquids are used to cool infrastructure equipment to improve thermal reliability and energy efficiency. What is not well understood is the permittivity properties of these liquids. What needs to be addressed is accurate modeling to predict the electrical performance of high-speed busses when these are immersed in a cooling liquid as opposed to air, and is the focus of this project.
• Sequential Lamination. In thicker PCBs and higher layer counts built with sequential lamination, some issues have been associated with this technology, such as resin cracks, delamination, resin voids, and failed microvia connections. The possible goals suggested so far includes: determining how best to test for the ability of the materials to withstand multiple laminations; testing specific laminates for the ability to withstand multiple laminations cycles; defining the critical material factors for a material to be compatible with multiple laminations; develop a standard test board and test methods to evaluate materials in multiple laminations; determine the limit as to how many laminations are possible for a given material; and, define the criteria of what “good” performance is versus “bad” performance relative to the material is when used in multiple laminations.

HDP is a global research and development organization based in Round Rock dedicated to reducing the costs and risks for the electronics manufacturing industry when using advanced electronic packaging and assembly.

FTG Completes Acquisitions of IMI, Holaday Circuits

TORONTO – Firan Technology Group has completed its previously announced acquisitions of Holaday Circuits and IMI Inc. Completion of the deals, both of which were announced last year, was slowed by mandatory US regulatory reviews.

Further to the previous announcements made by FTG regarding these acquisitions, FTG has now attained the approval from the Committee on Foreign Investment in the United States (CFIUS) and all closing conditions have been met and both acquisitions are now closed.

Combined, the acquisitions had sales of about $45 million pre-pandemic. The combined purchase price is approximately $19.3 million and the Holaday agreement also has an earnout of up to approximately $6 million depending on financial performance over the next 18 months. The acquisitions will be funded primarily from existing cash and bank facilities will be used for remaining balance.

The IMI acquisition bolsters FTG’s presence in RF circuit boards for the aerospace and defense market. The RF market is growing, and IMI’s specialized capabilities will enable FTG to better address this market segment.

The Holaday Circuits acquisition gives FTG a large, US-based facility that can address the market for high technology circuit boards, particularly for defense applications.

“FTG had identified a desire to add US manufacturing capacity for RF and high technology product for aerospace and defense applications. These acquisitions accomplish this and will complement FTG’s existing capabilities and locations,” stated Brad Bourne, president and CEO, FTG. “Having met the teams at IMI and Holaday Circuits, I am truly thrilled by their skills, dedication and commitment to excellence and I welcome them all to FTG.”

CHIPS for America Outlines Vision for the National Semiconductor Technology Center

WASHINGTON, DC – The National Institute of Standards and Technology (NIST) released a paper outlining its vision and strategy for a National Semiconductor Technology Center (NSTC), a key component of the research and development program established by President Biden’s CHIPS and Science Act.

Congress appropriated funds for the creation of a national center to support and extend US leadership in semiconductor research, design, engineering, and advanced manufacturing and strengthen US competitiveness.

The paper, “A Vision and Strategy for the National Semiconductor Technology Center,” lays out how the NSTC will accelerate America’s ability to develop the chips and technologies of the future to safeguard America’s global innovation leadership. The vision and strategy paper describes the center’s mission, core programs, and other features. In addition to creating and sponsoring research programs, the NSTC will work with academic and industry partners to create affiliated technical centers around the country, fostering a network of research and innovation that is unprecedented in scale, breadth, and focus. The NSTC will lay the groundwork for good jobs that will grow a domestic semiconductor workforce.

“The NSTC will be an ambitious public-private consortium where government, industry, customers, suppliers, educational institutions, entrepreneurs, and investors will come together to innovate, connect and solve problems,” said Secretary of Commerce Gina Raimondo. “Most importantly, the NSTC will ensure that the US leads the way in the next generation of semiconductor technologies which can enable major new advances in areas that will advance our economic and national security. While the manufacturing incentives of the CHIPS Act will bring semiconductor manufacturing back to the US, a robust R&D ecosystem led by the NSTC will keep it here.”

The NSTC’s programs are intended for the entire ecosystem: fabless companies, research institutions, community colleges, state and local governments, national labs, foundries, integrated device manufacturers, equipment vendors, materials suppliers, labor unions, and investors. The NSTC aims to fulfill the unmet needs of the sector with member services such as access to emerging materials and process technologies, digital assets and design tools, a chiplet stockpile, and incubation support for startups. It also will offer the opportunity for participation in industry grand challenges, road mapping and standards activities, and workforce training and technical exchange programs.

As outlined in the strategy paper, the NSTC has three high-level goals:

• Extend America’s leadership in semiconductor technology. Designing, prototyping, and piloting the latest semiconductor technology in America will provide the foundation for future applications and industries and strengthen the domestic semiconductor manufacturing ecosystem.
• Reduce the time and cost of moving from design idea to commercialization. The NSTC will leverage shared facilities and expertise for designing, prototyping, manufacturing, packaging, and scaling of semiconductors and related products that provide innovators in the US with critical capabilities to advance economic and national security.
• Build and sustain a semiconductor workforce development ecosystem. The NSTC will serve as a coordinating body and center of excellence to scale the technical workforce, including scientists, engineers, and technicians. The NSTC workforce programs will support expanding recruiting, training, and retraining for the semiconductor ecosystem, including reaching groups that are traditionally under-represented in the industry.

“The National Semiconductor Technology Center is designed to drive innovation and speed the transfer of new technologies to market,” said Under Secretary of Commerce for Standards and Technology and NIST Director Laurie E. Locascio. “This center will give the US semiconductor industry an enduring technological lead and help develop a skilled workforce capable of manufacturing the world’s most advanced devices.”

In addition to establishing a center for research, administration, and operations, the NSTC will establish technical centers by expanding and improving research facilities across the country or by building new, advanced facilities. Inventors and entrepreneurs, start ups and established businesses, chipmakers, materials and equipment suppliers, educators and trainees can all collaborate on NSTC programs. The NSTC is designed to address the real-world technical challenges of the semiconductor industry and provide immediate and hands-on knowledge transfer and training to participants.

Extensive feedback from stakeholders made clear that the NSTC must address a wide variety of issues for a great diversity of stakeholders. The Secretary of Commerce, in collaboration with the Secretary of Defense, will establish the NSTC through the creation of a public-private consortium as required by the Act.

Quanta Betting Big on Mexico

NUEVO LEÓN, MEXICO – Quanta Computer will invest a reported $1 billion in the northern state of Nuevo León, Mexican government officials announced in late May.

Governor Samuel García cited the nearshoring trend for the investment, saying the area expects an almost-ninefold increase in foreign investment in 2023.

“There’s a geopolitical issue, a conflict between the U.S. and China,” García said. “The U has said everyone has to leave China and come to North America, and the big winner is Nuevo León, which is receiving 72% of nearshoring. For Nuevo León, a good year in foreign investment was $2 billion dollars. This year, we’re aiming for $17 billion at the minimum.”

Quanta already has invested nearly $500 million and hired 2,500 employees in Nuevo León, Pedro Campa, vice president of manufacturing operations in Mexico, told Reuters.

Éolane Launches Malaysian Subsidiary

PENANG, MALAYSIA – Éolane is launching a new subsidiary here, which will include a new factory to better serve its customers as closely as possible to their markets, especially those of the Asia-Pacific Economic Cooperation (APEC).

Éolane Malaysia’s new factory is planned to open at the end of the year, and will join Intel, Hewlett Packard (now Keysight Technologies and Agilent Technologies), Robert Bosch, AMD, Litronix (now Osram Opto Semiconductors), Hitachi (now Renesas), Clarion and National Semiconductor at Kulim Hi-tech Park.

The company said the new facility in Penang will benefit customers by offering optimized sourcing of electronic components thanks to its geographical proximity to OEMs manufacturing in Southeast Asia.

Several customers have already confirmed their orders at this new site, with production starting in January 2024, Éolane said.

APG Makes ‘Significant’ Investment in XLR8

SAN CLEMENTE, CA – XLR8 EMS in May announced a significant equity investment from American Pacific Group, a $1.2 billion private equity fund. The small-tier electronics manufacturing services provider said the investment, the terms of which were not disclosed, would be used to expand its facilities and capabilities.

Founded in 2013, XLR8 is a rapidly growing contract manufacturer of printed circuit assemblies with a core focus on speed and technology for commercial, AS:9100, ISO:13485, and ITAR customers. For the past five years, XLR8 has been recognized by the CIRCUITS ASSEMBLY Service Excellence Awards as a leader in its category for quality and dependability, as voted by its own customers, and for the past three years won the top honor of overall leader in its category.

“We could not be more pleased to announce our new partnership with American Pacific Group and Concisys,” said Jason Powell, president and founder, XLR8. “This investment is a reflection of our intention to continue to meet and exceed the needs of our customers, and to remain at the forefront of technical solutions and high-quality, high reliability service. I look forward to continuing to lead the business with APG’s support, and to expanding our capabilities and footprint.”

Fraser Preston, managing partner at APG, said, “Jason and the XLR8 team are partners to some of the world’s leading and emerging aerospace and defense, medical, consumer and industrial companies for a reason. The team has a proven track-record for executing a differentiated business model, and we see a compelling opportunity to bring XLR8 and Concisys together, and to leverage our value creation framework, the “Q Process,” to further catalyze XLR8’s trajectory.”

XLR8 marks American Pacific Group’s second investment within the EMS market, following an investment in Concisys, a San Diego-based quickturn and prototype contract manufacturer, in August 2022. XLR8 and Concisys will partner going forward to best serve growing demand for highly technical onshore manufacturing solutions, and APG will continue to invest as both businesses further pursue organic and inorganic growth.

SigmaTron Sells Majority Position of Wagz

ELK GROVE VILLAGE, IL – SigmaTron announced that it reached an agreement in late April to sell a majority position of its wholly owned subsidiary, Wagz, to Vynetic.

During SigmaTron’s preparations for its third quarter financial statements, it was determined that updated projections resulted in a triggering event for the company’s goodwill and long-lived asset groups, which would incur non-cash impairment charges of approximately $23.1 million. These impairment charges coupled with Wagz’ operating losses triggered a default with SigmaTron’s credit agreements with J.P. Morgan Chase Bank and TCW Asset Management Company. The company also received a delinquency notification letter from Nasdaq indicating that it was not in compliance with the continued listing requirements of Nasdaq for failing to timely file the Company’s Form 10-Q for the fiscal quarter ended January 31, 2023. That notification also constituted a default.

SigmaTron said Wagz was in the process of developing three new products that were scheduled to be released during the middle of calendar year 2023. Sales of existing products during this development period did not materialize to expectations and resulted in a significantly higher level of losses and cash consumption than anticipated. Sales were negatively impacted by a shortage of parts for production for several months, resulting in missing the holiday season for sales, a slowing economy relating to inflation and a slower than anticipated acceptance of the product by the market. When projections were updated, the company determined that there was an impairment.

After negotiating the default with lenders, SigmaTron agreed to the sale of 81% of Wagz to Vynetic, which will become the majority shareholder of Wagz. Sigmatron will retain a 19% ownership position in Wagz as a passive investor at closing, and will provide a $900,000 working capital loan to Wagz during the month of April, during which time Vynetic would raise capital to support Wagz going forward.

SigmaTron has agreed to work with Wagz as an EMS provider pursuant to a manufacturing agreement but did not commit to further financial support. The company said it expects that the transaction will allow it to potentially recover some of the assets that it will write off as of April 30, 2023.

“During this period, the company’s EMS business has remained robust. We have seen some modest signs of a slowing economy and continue to experience supply chain shortages,” said Gary R. Fairhead, chairman and CEO. “However, at this time, we are cautiously optimistic that the revenue volume will continue, and we expect to add additional business based on the opportunities we are working on at this time. Regarding Wagz, we believe that the opportunities they are pursuing in the Pet Tech market remain attractive and we are hopeful that our continuing minority ownership interest in the company will yield benefits to the company in the future.

ISC Acquires MX Electronics’ Santa Ana Facility

SANTA ANA, CA – Interconnect Solutions Company, a provider of electromechanical and interconnect solutions, announced that it has acquired the Santa Ana-based assets of MX Electronics Manufacturing.

In a statement announcing the acquisition, ISC said the addition of MX Electronics’ assets adds capacity in many existing business lines, plus capability in printed circuit board assembly (PCBA) to better serve both existing and future customers. ISC is part of Tide Rock’s manufacturing portfolio.

“We are thrilled to be able to continue serving customers of MX Electronics just up the road from where they’re used to,” said Mark Papp, Tide Rock YieldCo president. “This acquisition is a natural fit for our company. It will add important capabilities to our shop and allow us to provide our customers with even greater value.”