Judy Warner (00:01) Hi David, thanks so much for joining us today on the podcast. It's great to have you back and what a joy it was to meet you in person at PCB West recently. David (00:09) It was a great time in Santa Clara, Judy, and I am thrilled to be back on the show. Judy Warner (00:15) Well, for our listeners who may have not met you or heard any of our last podcasts, why don't you take a moment to tell us a little bit about who you are and who PCBAA is for context. David (00:26) Sure, well, I'm privileged to serve as the executive director of the Printed Circuit Board Association America or PCBAA. The PCBAA was founded a little more than three years ago by a small collection of printed circuit board shops based in America, really looking at the market in Washington, the ecosystem in Washington and saying, hey, we don't have the kind of support, we need more investment in the way that the semiconductor industry receive chips, excuse me, receive support. by the Chips and Science Act. So from those five members three years ago, PCBAA has now grown to over 65 members. And that really is the entire microelectronics ecosystem. We have specialty chemical and materials providers. We have specialty tooling and equipment providers. We have assemblers, and of course we have board manufacturers and those getting into the substrate business as well. we are the educate, advocate, and legislate trade association. for microelectronics manufacturers in the United States. Our mission is to get the same kind of support for our industry as you see the government lending towards semiconductor fabrication. We really believe that without investment in the entire technology stack, we're not going to truly secure and resilient supply chains. So I'm very lucky to be leading this organization day to day. And of course, we've got a volunteer board and a number of officers who also serve. Our members really step up and make their voices heard in Washington. And I think the wind is at our backs. Judy Warner (01:56) Well, thank you for that. And I have to say, you know, early on we connected and from a absolute genuine point of view, because I've spent decades in the PCB manufacturing and EMS space. I know how important this is to people like the people in our audience for engineers. So can you just take a minute to give our audience context of why an organization like PCBAA and packs their day to day while their heads down doing really complex electronics design. David (02:27) Sure, and you're right, Judy. You have been with us as a supporter from the beginning. We're so thrilled that you are our first media partner, and PCBAA can't reach the audiences we need without shows like yours. I think if you're an engineer, if you're somebody in the microelectronics space who's focused on innovation, focused on design, focused on bringing next generation technologies to the marketplace, you do care about what happens in Washington. And the reason is that so often research and development, innovation, is co-located with production. When you talk about the fact that we used to have 2,200 board shops in America, now we have less than 150, right? We used to have 30 % of the world's market share. Now we have only 4%. What that means in real terms is not just that we've lost capacity and manufacturing capability, but we're losing research and development. We're losing engineering and design jobs. We think the next generation of microelectronics, be it semiconductors, integrated circuit substrates, or printed circuit boards. should be invented here in the United States. And so if that's your business, if that's your passion, PCBAA is working for you. Judy Warner (03:32) Well, it's easy, I think, for engineers and our audience to lose that perspective because until it's too late, like we were all caught on our heels when 2020 hit and boy, did we all get a wake up call there. It's been a very rocky four years geopolitically and we're just coming out of a crazy political season here in the United States. But what that means is that there's going to be a new Congress. And I know that you will be speaking directly to bipartisan members of Congress because this is in no way a partisan issue. We need it regardless of who's in the White House or in the Congress. So talk about where you see things going in the year ahead. David (04:28) Yeah, we're really excited for the 119th Congress. Since we were launched, we have had bipartisan support for what we would call industrial policy, the idea that the government needs to get involved. And one thing I always point out is that the US isn't leading on industrial policy. We're playing catch up. If you go overseas and ask why it's so competitive to build, to design, and produce microelectronics overseas, very often the answer is because there's some form of government subsidy, right? The land for the factory is free worker, housing is subsidized, the road to the factory is built and ready for your operation. These are very real world subsidies. This is industrial policy. And regardless of what nation is doing it, it's a choice because they want to own, they want to control, they want to dominate certain market verticals. We think the United States has to get off the sidelines. We have to make a decision that these are critical technologies and that we need to invest. In the previous Congresses, we've seen support for this idea that we need to go beyond semiconductor fabrication into other areas of the microelectronic stack. Of course, now we've seen a change in the White House. We're going to see a change in administration personnel at places like the Department of Commerce and Department of Defense. And of course, also we're going to see a new Republican Senate majority. And I think the Republicans are going to retain their majority in the House of Representatives. What that means for us is that we will continue to make the arguments that we have made but that the levers, the modalities to get to the results we want, right? Tax credits, direct investment may be slightly different in the 119th Congress, but I don't see that this is a partisan issue. As you said, Judy, I don't find that Democrats versus Republicans want to invest in American manufacturing. It's simply the way that we do so that may change a little bit as we head into 2025. Judy Warner (06:15) Well, we've talked about it in the past, but I'd like an update for you is what some of those levers are and how they relate to not only ways that our government can support our industry, but also ways that they can inspire private investment. can you, I gave you a handful there, but if you could talk about those items, it'd be great. David (06:37) Yeah. Not at all. You know, we're fortunate that we don't have to put all of our eggs in one basket, as they say. There's a number of funding and regulatory and tax policy provisions that we think the industry would benefit from immediately. So let's start with some of the funding vehicles that are out there. First and foremost, I think, is the Defense Production Act. Back in 2022, we pushed in partnership with IPC for the president to invoke the DPA, which is an old law designating critical technologies, cutting government red tape and speeding the acquisition of certain critical products. With boards and substrates designated under the DPA, there's now what we call DPAI or Defense Production Act investment account money for critical research and development. The Pentagon has long recognized that modern weapons systems rely on microelectronics. So we need to make them here in America and we need to lead in the innovation space. What that means in real terms is that companies like GreenSource, Calumet, and TTM have received DPAI grants, direct investments. think now it's almost $118 million in total. We have to make sure that money is first authorized and then appropriated by the Congress on an annual basis. It's a fight that we've joined year after year after year, again, with our partners at IPC, because Congress holds the power of the purse. They give the Pentagon their allowance, if you will, every year. And so we've pushed very hard to make sure that that DPAI account is funded and that the Judy Warner (07:39) Mm. David (08:04) relevant secretaries, the relevant executives that the Pentagon execute on those funds. Another way that we're pursuing direct funding is through our bill, HR 3249, the PCBs or Protecting Circuit Boards and Substrates Act. It calls for a direct grant program, very similar to CHIPS, through the Department of Commerce, as well as a 25 % tax credit on the purchase of American-made PCBs and substrates. That is so important because it creates that all consuming, all dominating demand signal, right? You talked about private money, and this is a great example of where private money comes from. When Wall Street, when the VC community asks whether they should be capitalizing new PCB factories, new PCB equipment, training new PCB workers, one of the questions is where's the demand, where's the customer? We really believe that money will come off the sidelines when the government gets involved and Uncle Sam sends an unmistakable signal that these are important industries. The CHIPS Act, Judy, invested $52 billion in government money. By some accounts, more than $460 billion in private money, exactly, has come off the sidelines after that initial government investment. We really believe that a strong signal from the government that PCBs are a critical technology will inspire private money to get off the sidelines. And then finally, from a policy perspective, we're pushing many more Judy Warner (09:13) Wow. David (09:30) buy America controls and guidelines inside the federal government, some of it through dual use and commercial off the shelf technology in the Pentagon. We want to ask the government to sort of redefine what is critical infrastructure and critical technologies because we really believe that there's entirely too much reliance on foreign sourced microelectronics, some of it produced by folks who I think you could characterize as our competitors or adversaries. And that's not what we want when we talk about powering Wall Street, making medical devices run. Judy Warner (09:56) No. David (09:59) keeping the water and power on. We think there needs to be a domestic supply chain for those critical verticals. And that's one of the things that we're pursuing in Washington. Judy Warner (10:09) I mean, these issues are in mainstream media all the time and the concern has been ongoing. So kudos to you for getting as far as you've gotten in a relatively short time and helping the Congress understand that, you know, as your awesome tagline is, is chips don't float, right? We can make the chips, but it's a, this is a big problem, right? It's for the whole ecosystem. But you mentioned briefly about workforce too, and I've heard and I'm interested in your perspective on that some of the grants and things that the government may be leaning into is workforce development, which is sorely needed. What are your perspectives on that aspect of the industry? David (11:00) You know, it's not just microelectronics manufacturing, it's, would say manufacturing as a whole and high tech development as a whole, where we face a shortage of workers. American universities simply are not producing a robust enough talent pipeline to fill our factories. And so certainly my members talk about the workforce challenge. I'm sure the folks in the semiconductor industry would address this the same way. I'm encouraged by some signs, for example, within the department of commerce, the department of defense, within the white house and the Congress. They know that we need more American workers to fill the factories that are gonna be coming online. I'm also encouraged by what we're seeing in higher education. If you notice, when they did a groundbreaking ceremony in Columbus, Ohio for a new Intel facility, it wasn't just the president of Intel who was on stage. It wasn't just their congressional delegation that was on stage, but it was also the president of Ohio State University. And to me, that's very telling. Local universities understand that once an industry... begins to pop up and thrive and be backed by the government in their local jurisdiction, let's say, that it makes sense for them to start creating a talent pipeline. And so I think in places like Arizona, in places like New York, Ohio, as I mentioned, you are seeing secondary education institutions come together. You know, there may be trade schools that need to get into this mix. Certainly we need to begin teaching people STEM and STEAM educational programming all the way at the junior high and high school level. Judy Warner (12:01) Mm-hmm. David (12:23) if we want to really have a robust workforce, we're not going to run this with empty factories and we're not going to design the technology of the future, I think, relying solely on workers who come in, let's say on H1B visas. We've got to have a domestic workforce as well. So it's one of the toughest challenges out there, right? We can't mince words about this. Our organization is again, largely focused on let's get those capital investments. Let's get those tax breaks. Judy Warner (12:28) Right. I think so. David (12:49) but we're all very aware that a workforce and a talent pipeline challenge is out there. Judy Warner (12:55) Well, I'm encouraged to hear that you are seeing some hopeful signs and I'm hearing bits across the industry too about how critical this is. know SMTA and my friend Tara Dunn has started a program there for the assembly industry and I know IPC is leaning heavily into it. So I think I agree with you, at least from my perspective, it seems like a big problem, but I think it also opens up opportunities even for people like the people in our industry, right? As the industry grows and the supply chain becomes more robust, the continuing of leaning hard and having the funding and the governmental commitment to supporting R &D is going to open up more opportunities for engineers, which is exciting, I think. what are you looking forward to? What are some of your... Give us some vision casting here. What is your hope as you go into 2025 and areas you'd like to make some progress? David (14:00) Yeah, so let me first start with our membership. You know, I'm really proud of the fact that we've gone from five to 65 members. And again, today we have a real diversity in terms of our membership. I've seen a lot more interest from specialty tooling manufacturers. I'm seeing a lot more interest from specialty chemical manufacturers. I'm seeing a lot more interest from the assembly community. And you mentioned SMTA. I'm looking forward to being at their show in 2025. And we do see the assembly community as a really critical component to our victory there. In addition to, you know, some of the remaining board shops. Judy Warner (14:26) Mm-hmm. David (14:30) that are not members of our coalition. So expanding our membership is critical because Judy, of course we need to keep the lights on and fund robust advocacy efforts. But every time a new member joins, we also get new congressional representation. Our political power comes from our workforce footprint. When you join PCBAA, you bring with you in many cases a new district, a new state that wasn't previously on our map. That is a meeting that we will then go have on Capitol Hill to say, we're doing high tech manufacturing in your state, in your home district. please join our cause. So membership is really a critical focus for us. The other thing I think that we're very excited about is the prospect for tax reform that might include the 25 % tax credit. I think that what you see with a Republican takeover of the House, the Senate and the White House is optimistic prospects for a tax reform bill early next year. We of course have a tax component, a tax credit component as part of the PCBs Act. And so we're going to be lobbying heavily with committees like Ways and Means, for example. to say, hey, if you're going to reform tax policy, let's look at what would incentivize the purchase of domestic printed circuit boards and substrates to revitalize a critical industry, an industry important for our national security and an industry important for America retaining its leadership in electronics manufacturing. So that I think will be the focus of our organization's legislative and policy efforts, probably over the next three to six months. Judy Warner (15:55) It's exciting. I really wish you the very best. your point about tax credit, we really didn't touch on that earlier. But you know, the obvious question is, well, other countries are getting subsidies, other countries do have low cost wages, and we can't compete. So having something like a tax credit that allows us to compete and having those subsidies is really It's that as the saying go, rising tides raises all boats. So it's not just good, it's good for the whole industry. typically, historically Republicans tend to lean into tax credits. So that would be fantastic if we had more buy-in. For our audience, also want to encourage you, if you work at a large OEM, you make an excellent member for PCPAA. And me, I just joined as an individual because I've watched the whole industry go from US led, you know, back in the eighties to losing it to China and pulling my hair out to where we are today. So I really feel these issues in my, in my heart and soul and working closely with engineers. I've seen, you know, what the effects have been. So I encourage you to join if, if you, you have a place either individually as a company. So. Well, David, thanks again for this great update. It's been a crazy year, but it's wonderful to hear that you've come so far, that you have really a lot of optimism going into 2025. And hopefully as we settle down, once the new administration gets settled down, I hope you'll come back and give us another update. David (17:42) Judy, I can't thank you enough for your personal passion for this issue, but also the way that you and your great show helped reach critical audiences for us. We really appreciate you helping to be part of our educate, advocate, and legislate mission. I am excited for the new Congress for the coming 2025, and we'll be back in the new year to bring you and your listeners up to speed. Judy Warner (18:02) Sounds great. Well, thanks again for joining us. For our audience, I trust you've enjoyed these insights from David Schild of PCBAA. Make sure you go check out the show notes. I'll put some links to their website and their membership page. I'm sure they would love to have you join and you can just, there's a one-pager on their website where you can go learn more details about all the fabulous work they're doing. We will see you next week. Until then, remember to always stay connected to the ecosystem.