Despite its critical connection to our national and economic security, microelectronics manufacturing has largely been offshored over the past 25 years. This reality threatens the ability of the U.S. to produce microelectronics at scale.
Every electronic device contains what is known as printed circuit boards. These are advanced microelectronics — the central nervous system of all electronic systems. Without PCBs, semiconductors cannot communicate with the devices or systems they power.
In the late 1990s, the U.S. had more than 2,000 PCB companies. Now, the 145 PCB companies that remain on U.S. soil can meet routine demand for defense applications, but they don’t have the ability to scale up in times of crisis, according to the Global Electronics Association.
The problem not only is that America lacks the capacity to produce PCBs and other microelectronics. The other issue is that our primary supplier is also our main adversary. Too often our defense and critical infrastructure systems contain microelectronics stamped, “Made in China.”
Supply chain contamination
Depending on China for key microelectronics is a risk to our national security. Govini recently published its annual “National Security Scorecard.” They found that 9 percent of top-tier defense subcontractors had Chinese-sourced components in their supply chains.
U.S. officials also are concerned that the supply chain might have additional vulnerabilities. For example, Reuters reported that U.S. inspectors found rogue communication devices in Chinese solar power inverters. They found similar capabilities embedded in the electronics built in cranes unloading cargo in one of our largest ports.
Those are just the tip of the iceberg.
A “phone home” functionality could provide a way for the originators to control not just solar panels, but also electronics powering air traffic control systems, cellular communication, banking and medical systems, according to study by the Carnegie Endowment for International Peace that cited vulnerabilities from internet connected devices used in America but made in China.
Taking steps to address this vulnerability is a national security and economic imperative.
More action needed
Fortunately, some in Washington recognized this vulnerability. Congress included guidance in the fiscal year 2022 National Defense Authorization Act requiring the Department of Defense to have a plan by 2027 that removes from the defense supply chain all dual-use components originating in China, Russia, Iran and North Korea.
In 2023, the Biden administration directed that the DoD invest in microelectronics and support domestic production of PCBs using Defense Production Act (DPA) Title III authority. The DPA gives the president broad powers to influence domestic industries to support national defense and solve supply issues.
To date, the government has disbursed more than $100 million to PCB manufacturers across the country. This is a good start in the right direction, but sustained, impactful investment is needed.
U.S. servicemembers depend on trusted and secure microelectronics. American families should similarly feel confident in the water, power and telecommunications systems that make modern life possible.
If the U.S. is ever to reduce the risks caused by dependency on a peer competitor, we need to do much more, before it’s too late.
