A discussion with PCBAA president Shane Whiteside.

I recently sat with Shane Whiteside, president and CEO of Summit Interconnect, in his capacity as chairman of the Printed Circuit Board Association of America (PCBAA), to discuss the state of the PCB industry and the effects of the additional tariffs currently in place.

Whiteside’s PCB manufacturing and leadership career spans several decades, which lends itself well to PCBAA’s mission to advocate for a stronger US PCB industry. The association is working hard to educate and influence those in Washington, DC on the importance of a secure US electronics supply chain.

On its website PCBAA states in the late 1990s the US produced 30% of the world’s PCBs (based on value), but now produces only 4%. When I first joined the PCB industry, cellphones, laptops and many other personal electronics were just coming of age, meaning the volume of electronic products produced that needed a circuit board were considerably less than what is required today.

There is no doubt the nation’s PCB manufacturing capacity has decreased, but, at the same time, more PCBs are being built today than ever before and for products the US never produced anyway, in part because they did not exist 25 years ago.

Greg Papandrew: While a strong domestic PCB manufacturing industry is important, the reality is that we can’t build it all here. What do you think should be the goal of our industry and what would be that “correct” percentage?

Shane Whiteside: There are no illusions that we will bring back, or produce domestically, the millions of PCBs necessary for high-volume commercial products like cellphones and laptops. I believe North America will maintain its leadership in building smaller-volume PCBs with high-reliability compliance requirements or for quickturn commercial applications. However, a realistic goal would bring our percentage increase from the estimated 4% to at least 6% if not 8% of the world’s total manufacturing capacity.”

To spur investment as part of a larger tax package to incentivize domestic manufacturing, the PCBAA is advocating for a 25% tax credit on the purchase of American-made circuit boards. I do like the idea of incentives (tax breaks) rather than punishments (tariffs).

GP: Interestingly, to meet customer demands, many domestic board manufacturers “sub out” partial manufacture (mass-lam) and/or outsource (through brokers like me) PCB manufacturing in its entirety from offshore facilities.

Would those boards qualify for the credit as well? Or would there be percentage determined of a “value-add” that would allow that product to qualify for the rebate? And do you think the credit should apply to PCBs that couldn’t go offshore anyway like MIL and ITAR work?

SW: That all depends on how Congress writes the law. However, the original intent of the tax credit is to incentivize the total manufacture of the PCB here in the US and boards that are strictly commercial that are not under any export control.

We desperately need to strengthen our domestic capabilities to build high-technology PCBs. Many don’t realize that tomorrow’s high-tech military electronics are driven by our ability to build those high-tech commercial PCBs today.

GP: Until we have that much-needed additional manufacturing capacity, are you concerned that the tariffs and proposed tax credit will have the adverse effect of increasing demand on an already limited domestic supply, further driving up pricing and lead times and possibly forcing buyers to go offshore anyway?

SW: Until that much-needed capacity becomes available, there is no doubt that tariffs, rebates or tax incentives will increase domestic pricing and lead-times. The law of supply versus demand does apply.

However, it won’t be the tariffs that brings manufacturing back to the US but rather the rebates or tax incentives. The former is a punishment while the latter is an incentive. As we have seen, tariffs can be changed on a whim while a tax incentive is codified by law.

You can’t walk into a bank with a business strategy based on tariffs and expect a loan, but you could if there are rebates or tax incentives involved. And it won’t just mean banks but private equity as well. A rebate or tax incentive becomes a durable, which incentivizes the spending of monies needed for the expansion of manufacturing capabilities or the building of new facilities.

Countries like Thailand have received billions in both government subsidies and private investment to bolster their PCB manufacturing capacity. The red tape and regulations needed overseas to get a facility built is much different – most likely less – than here in the US, and yet it has taken two to three years for such facilities to become operational.

GP: You know what it takes to build a PCB manufacturing facility. By the time government or private funding is secured, the pulling of permits, the time of construction, the equipment installs, the hiring and training of personnel, how much time would be required before we see the first PCB shipped out of a newly built US manufacturing facility?

SW: Unless you can find a building with the necessary power already installed to run a plating line, you would be looking at 18-24 months to stand a building up. Then comes equipment installation, the hiring and training of personnel and then the incremental increase of production of both manufacturing capacity and technology. Optimistically, [it could be] up to three years before that facility becomes fully operational.

My takeaways from our interview are that, even if one could go to a bank today with the incentives in-hand as law of the land, the hope for increase in manufacturing capacity is still years away.

And even when a building is at the ready, it needs to be filled with equipment that presently is not made in the US, using overseas raw laminate and chemical suppliers. It also needs to use more automation than ever before since the labor pool has been discouraged from manufacturing for some time – but that is for a future column, or two.

I applaud the efforts of the PCBAA and how it shows Washington the importance of printed circuit board industry.

Greg Papandrew has more than 25 years’ experience selling PCBs directly for various fabricators and as founder of a leading distributor. He is cofounder of DirectPCB (directpcb.com) and can be reached at greg@directpcb.com.

Ed.: A previous version of this column identified Whiteside as president of PCBAA. His correct title is chairman. Will Marsh is president.