Judy Warner (00:02.086) Hi David, thanks so much for joining us for our what Q2 quarterly catch up with PCBAA. I've been seeing a lot online and I know you've been a busy guy and there's been a lot going on so I look forward to sharing all that news with our audience. Before we get talking though, why don't you give a quick introduction of yourself and of PCBAA and then I have a lot of questions for you my friend. David (00:29.24) Thanks, Judy. It's always great to be with you. I'm David Schill, the executive director of the Printed Circuit Board Association of America. We are a trade association focused on an educate, advocate, and legislate mission. We represent more than 75 companies across the PCB ecosystem, critical materials suppliers, board manufacturers, assemblers, and even OEM manufacturers. And our mission is to go to Washington and to spread the word that we're not done. with industrial policy. We're not done with reshoring and restoring microelectronics manufacturing capacity. There's more to be done. A lot of it refers specifically to printed circuit boards and integrated circuit substrates. And that's what I do in Washington every week. Judy Warner (01:11.655) So just so our audience doesn't lose this geeky conversation you and I are going to have, why is this important to people, engineers that are in our ecosystem as they try to get products to market and get prototyping done and keep driving technology forward, especially in an era of explosion of AI data centers and everything that's happening? David (01:35.8) Well, I think that right now you're seeing a confluence of factors, all of which make it the best time to do manufacturing in the United States. First, there are unexpected supply chain disruptions. We can go all the way back to the COVID-19 pandemic, but any time you open the newspaper now, you see interruptions to shipping, interruptions to commerce, an uncertain market with regards to tariffs. And so if you're concerned about being able to build things in the United States or you work for an employer who would like to do more production or sourcing in the United States, think the mission of the PCBAA is relevant to you. The other thing that I would say, Judy, is that so often innovation is co-located with production. And what we have seen as we've gone from 2,200 board shops in America to less than 145 board shops in America is that the research and development, the work of so many talented engineers has also been off short. We don't just lose the production capacity. We lose the thought leadership that often happens at that factory or close by. So I think anybody in the engineering space, anybody in the design space needs to be concerned about this move overseas, both for the trusted and secure and reliable nature of what we have to produce, right? Critical microelectronics, but also for their livelihood, for their career. It is a good option, I think, to have a career in microelectronics manufacturing. We just need to make the United States a competitive place to run that kind of business. Judy Warner (02:56.783) Yeah, and competitive is the key, right? And I heard you say two things. One, when that innovation goes offshore, we completely lose control of the IP. That's never a good thing because the US has been always, you know, sort of the tip of the spear of innovation. And also then, you know, that lack of affordability, right? And I know that's something you care about. So it's not a naive, like, let's just build manufacturing in the United States and not realize that it's more expensive to do that here. But I know you guys have ideas and so that's why I wanted to share this update. So let's talk about since our last, our first quarter update, we were talking a lot about tariffs and there was a lot going on at that time and it was really hard to tell where we were. So where are we? I know you just had a big event in DC that we'll get to a little bit later, but David (03:31.372) Yeah, absolutely. Judy Warner (03:54.19) Tell us about the bill that you proposed to Congress and where we are with that right now in the second quarter. David (04:00.856) Sure. Well, we're here in the 119th Congress and for the third time, the third Congress in a row, we've had introduction of the Printed Circuit Boards and Substrates Act, the PCBs Act. And basically that bill, H.R. 3597, is co-sponsored by Mr. Blake Moore from Utah and Representative Rajah Krishnamurthy from Illinois. It's great to have two members on both sides of the aisle who both represent PCB facilities leading the charge on this bill. And remember, its two main components are... a grant program very similar to the Chips and Science Act that would allow for capital investments, hiring new workers, building out new facilities, purchasing tooling and equipment. And also, and I think more importantly, a tax incentive provision. And that provision is really focused on the purchaser. We want American PCB companies to be able to say to their customers, here's a 25 % tax credit on the purchase of American made printed circuit boards and integrated circuit substrates. It's really a great bill. We're already starting to pick up co-sponsors and we think as a successor to the Chips and Science Act, this is the natural next step for Congress. Judy Warner (05:06.587) Yeah, we've talked about that. It really didn't go far enough. I've always really liked your, because I come from the PCB industry, I've really liked the idea, which says it all, which is chips don't float. You know, those chips, great, we build them all here, but what do we put them on? So I like that tagline because it really says a lot. So what do you want, do you want to jump in now to the annual updates and David (05:21.101) Yes. David (05:24.491) Exactly. David (05:35.246) worth. Judy Warner (05:35.933) how you're getting that ball down the field. David (05:38.638) Yeah, so one of the things that we did very recently was we had the PCPAA 2025 annual meeting. This was our fourth such gathering, largest attendance ever and the most time spent with lawmakers ever. We had almost 60 executives from across the ecosystem. Again, we had an OEM panel focused on what the defense primes need from our industry. We had discussions with the Department of Congress. We had Arizona Senator Ruben Gallego as our keynote speaker. It really was two very, very productive days. First of networking, gathering of competitive intelligence, discussions about the future of our industry and what needs to be done. And then an entire day spent on Capitol Hill, actually calling on key lawmakers to brief them and their staffs about the importance of HR 3597 and why we need competitive incentives for America's PCB producers. So I was thrilled to see so many of our people in one place, of course. You know, the PCB industry is spread across the United States and I'm grateful to our members for giving us the time and the talent that a meeting like this requires. And I'm already looking forward to a bigger and better meeting in 2026. Judy Warner (06:43.591) So I know for the last few years, you've been doing sort of the really down in the trenches and now John Vaughn has joined your organization to help build up the membership so you could have a louder voice there. What do you think is the, you know, after those two days of very busy and impactful meetings, what do you think the benefit and outcome was of those meetings and what are some of the highlights that you got maybe as you did interact with lawmakers? David (07:12.972) Yeah, so I think a couple of key takeaways. First, there is a consensus now up and down the ecosystem that we need to be aligned and speaking with one voice. It's always great when you see copper foil manufacturers sitting with board manufacturers, sitting with assemblers, sitting with folks from Raytheon and Northrop and Lockheed discussing how we all need to work together to make sure that there is a trusted and secure supply chain of microelectronics made right here in America. putting all these people in one room and seeing that we have a combined and shared mission. That was really great. The other thing is I'm really encouraged by what we heard from both members of the House and the Senate, as well as representatives from the administration. We are not going to see industrial policy wither on the vine under the Trump administration. I think there's going to be different tactics. There's going to be perhaps a slightly different philosophy. But the objective that you saw during the Biden administration, I think has been continued into the Trump administration, which is we want to make more of the things that we depend on. right here in America. I think everybody when they were departing Washington, you know, on that Thursday evening, probably was headed home with a message that people in Washington are slowly but surely learning about the importance of the work that we do. They take it seriously. And we have real partners at the table. Judy Warner (08:27.613) That's great. Just anecdotally, I heard some comments just on the evening news talking about from the Trump administration saying that they weren't very bullish on subsidies, but they were very interested in lifting up industry. So I was curious about, you know, what kind of feedback you were getting. versus like you're talking about the grants, do they see those as subsidizing or are they more bullish on the taxes or do you have any kind of early inklings of what some of those tactics might be? David (09:07.65) Well, what I'm hearing in Washington in recent weeks is that certainly tariffs are one tool in the toolkit, but there's not an intent to abandon the incentive side of things as well. Now, we obviously think that a tax credit is a real game changer. Tax credits tend to have a life and a continuance that makes the environment more stable. I think what you're seeing right now, and everybody would acknowledge this on both sides of the aisle, is there's a lot of unpredictability in the tariff system that currently exists, right? Judy Warner (09:17.692) Okay. David (09:35.512) They're on one day, they're off the next. That makes business planning, it makes long-term planning very difficult. And so while we would argue for a selective approach to tariffs, right, a scalpel instead of a sledgehammer, I do think that there is still an appetite in Washington to provide real incentives, whether or not grant programs, similar to what we had with chips and science, will find life in the new administration. I think that's an open question. But tax breaks, tax incentives, essentially build and buy America tax breaks. I think those do have a future in Washington. Judy Warner (09:47.037) Mm. Judy Warner (10:05.807) Okay, that was sort of my sense of things, but yeah, the world and what's going on is a little unstable yet for any of us to look with confidence into this crystal ball. So, I know you were honored to give a testimony, which I won't steal your thunder. So why don't you talk about the exciting testimony you were able to give recently. David (10:13.93) Absolutely it is. David (10:33.9) Yeah, so I'm really thrilled that the PCBA was invited to testify before the U.S.-China Economic Security Review Commission. This is a group chartered by Congress that every year produces a report saying how the United States can remain in a competitive position with China. And so I was part of a panel focused on industries that China currently dominates. And of course, in microelectronics, we already know the state of play. Nine out of 10 boards come out of Asia, six out of 10 boards. come from mainland China. And I think this was news to a lot of the commissioners, but I was really honored to sit there with my fellow panelists and lay out how over 30 or 40 years, not because of accident and not because of a pure level playing field, the Chinese have attained dominance in the PCB market. It's because they have incentivized production. It's because they have subsidized production. And if the US wants to retain this critical manufacturing capacity, what I told the commissioners was our leadership needs to act. There is this thing referred to as a China plus one strategy. There is a desire to not be dependent on mainland China for manufacturing. But if we're not careful, Judy, we won't be the plus one. And that was one of the things I spoke to the commissioners about was the need for our leaders to act in the same way that Vietnamese government officials are acting, Thai government officials are acting. We've got to be competitive or the factories of the future will not be built here. Judy Warner (11:57.445) What are the risks if the US is not that critical plus one? David (12:03.308) Well, I think we have seen that stretching our supply lines over the Pacific Ocean comes with some inherent risks. There are any number of manmade and natural interruptions to these extended supply chains. What I think the government needs to do first is establish that beyond ITAR controls, there are other critical industries that we need to have manufacturing capacity for right here at home. And you think about banking servers and you think about medical devices and you think about the water and power grid. and how dependent those are on microelectronics. And then you crack those systems open and you say, what's the stamp? Very often it's made in China, very often it's overseas. And what I think we don't realize is how we already have critical infrastructure dependencies on foreign microelectronics. I don't know that people are really aware of the risks inherent in that system. We can do a lot to fix that. We can do a lot to correct that. But that's why the first part of our mission, educate, advocate, legislate, is educate. People simply aren't aware of what's happened over the last four decades. Once they're informed, it begs the question, what's the call to action? What do we need to do? Judy Warner (13:09.275) It makes perfect sense because I'm with you seems to be a lack of education. People just aren't aware that our entire infrastructure, our power grid, not to mention critical military, you know, and you know, this administration is trying to assert this piece through strength, but you know, there's a lot going on in the world that we're trying to hopefully stabilize and be part of, you know, stabilizing that. if, if, if David (13:17.346) Absolutely. Judy Warner (13:38.085) we can't have strength unless we have secure supply lines and hopefully then that strength won't need to be asserted, but we shouldn't put those systems at risk, certainly. Anything else that I feel like I could dig a lot out of you in the way of details, but I don't want to take too much of your time. Is there anything else that you'd like to share or perhaps an encouragement you would like to? give to our engineering audience to help them engage with your organization. David (14:06.67) Sure. Well, two things, Judy. First, I would say that we're going to begin a grassroots campaign very shortly. And I would call on those listening in your audience to be a part of that program and also, of course, to consider membership in the Prince Circuit Board Association of America. We started less than four years ago with five founding members. We're north of 75 active participants today, and it now includes companies like RTX. One of the things that I'm seeing is that at the very beginning of the supply chain, raw minerals coming out of the earth, refined materials like copper foil, there is a recognition that this supply chain is important. And then at the other end of that process with those OEMs and those defense primes, there is a similar understanding. So if you're listening to this broadcast and you're wondering, is my company, is my organization doing anything in Washington to advance domestic manufacturing, to make sure we have secure and trusted supply chains? I would encourage you to reach out to myself, reach out to John Vaughn, who leads our membership and recruitment efforts. We want to grow and diversify this organization. There is real strength in numbers. Political power comes from putting more pins on the map, more geographic locations in play. And so I am eager to talk to anybody who shares our vision of a secure, robust, domestic manufacturing capacity. So it's a really exciting time. I think we'll have more for you when we have our next conversation about progress. on Capitol Hill, the direction that the administration is going, and of course, the developments in the news that affect all of us. Judy Warner (15:33.019) Yeah. Well, thank you so much for taking the time to give me and our audience's update. For our audience, I would encourage you as I have done, I have put skin in the game because I think this is really important to our industry. And I've been part of this thing for over 30 years and chips don't float, boards are important. And so I encourage you, I will put links in the show notes below, but why don't you quickly give us the URL for your website, David? David (16:02.808) Sure, visit us anytime online at PCBAA.org and find us on LinkedIn or Twitter. We're always excited to connect with new folks across the ecosystem. Judy Warner (16:13.393) Thank you. For me, for our audience, I would say just connect with these folks on LinkedIn. That's how I stay up to date and I have been enjoying seeing all these recent updates and I appreciate how that keeps me in the loop and certainly go find their membership information which you can find at that URL. David, thank you again. I look forward to our next catch up. It sounds like things are going in a really positive direction. David (16:39.394) Thanks, Judy, we appreciate your support and it's always great to talk to you. Judy Warner (16:42.855) For audience, thanks so much for joining us today. I hope you enjoyed this quarterly update with David Schild and PCBAA. We'll see you next week. Until then, remember to always stay connected to the ecosystem. And that's a wrap.