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The U.S. government, the electronics industry, and academia must continue to step up their joint efforts to address risks and gaps in the defense electronics supply chain.
That was the bottom line that emerged from a recent two-day meeting hosted by the U.S. Partnership for Assured Electronics (USPAE)—the group’s first in-person meeting since it was formed in 2020—which attracted an array of top leaders of industry, government, and academia.
The USPAE convened the event as part of its mission to foster increased dialogue and working relationships between the U.S. Department of Defense (DoD) and leaders across the electronics industry. The meeting’s agenda featured sessions on bridging the gap between technology and trust; overcoming the skills gap; and understanding the trajectory of current efforts in DoD and Congress to address the government’s microelectronics needs.
USPAE members in attendance included several large defense prime contractors; companies that design and manufacture printed circuit boards (PCBs) and PCB assemblies; materials providers; distributors; academic experts; and more. The domestic supply chain for roughly 80% of the DoD’s printed circuit boards was represented in the meeting.
On the government side, attendees included representatives from the Office of the Undersecretary of Defense, Research & Engineering; the Defense Microelectronics Cross-Functional Team (DMCFT); the DoD Industrial Base Analysis and Sustainment (IBAS)office; the DoD Executive Agent for Printed Circuit Board and Interconnect Technology; the Defense Logistics Agency; and the Joint Defense Mantech Electronics Subpanel.
Considering the well-connected and experienced nature of the attendees, it was remarkable that all of them said they had learned things in the meeting they didn’t know and wanted to continue a higher level of dialogue. Industry attendees said they now felt they had “a seat at the table.”
The meeting followed the “Chatham House Rule,” which means the participants are free to use any information they heard, but the information cannot be attributed to any particular speaker or organization. The following recap is based on reliable note takers.
Participants agreed there were five major takeaways from the discussion.
1. The electronics industry, academia, and government must continue to work together more closely. The U.S. Government has become keenly aware of the risks created by being reliant on foreign sources for electronics. Many electronics companies are buried deep in the supply chain, and the DoD—and even some OEMs—have little to no visibility into who their lower-tier suppliers are or what risks they may present.
2. Semiconductor chips “don't float.” They are attached to electronic components and systems that enable them to function. When it comes to defense electronics, policy makers have been focused on building up trusted foundry capabilities for state-of-the-art computer chips. But putting those chips into defense systems requires advanced packaging technology, multi-chip substrates, and high-density multi-layer circuit board and assembly processes that are not available at scale in the United States. Investing in wafer fabs in the U.S. without investing in the rest of the electronics manufacturing ecosystem, e.g., printed circuit boards, PCB assemblies, and more, means U.S-made chips will need to be sent offshore for integration into electronic systems—leaving major U.S. supply chain risks in place.
3. Fixing America’s electronics supply chain gaps is doable and affordable. The Congress and Federal agencies are working toward investing at least $50 billion in advanced foundry capabilities over the coming decade. The PCB and interconnect industries need capital investments of just a small fraction of that figure to build the advanced electronics manufacturing capabilities that go along with more advanced chips. The current moment is a once-in-a-generation opportunity to strengthen the entire U.S. electronics industry, creating high-paying jobs and a more resilient economy in the process.
4. The workforce remains a challenge for the industry and DoD. USPAE members tell us that finding and retaining enough adequately skilled workers is one of their greatest challenges. One person from DoD said, “Manufacturing dominance underpins technical dominance.” But all sides recognize we are not doing enough of the right things to produce the needed workers.
Many of the government’s education and workforce development initiatives are focused on producing more engineers with degrees. While those skill sets are needed, companies also need more non-degreed technicians and operators. Also, people with degrees typically travel to wherever the jobs may be. Those graduating from technical schools tend to remain local, which means we need excellent training programs to be available or replicable in every region.
While the pipeline for talent remains constricted, the DoD is beginning to establish programs that cover all educational levels, from “K through Gray.” In November 2020, the DoD kicked off the National Imperative for Industrial Skills with nine projects funded at $27 million. On the civilian side, the U.S. Department of Commerce’s Economic Development Administration (EDA) in July announced it will allocate $500 million to invest in building and strengthening regional workforce training systems and sector-based partnerships. These programs will be helpful, but much more is needed.
5. Parts traceability is not free. Some critical defense and security applications today require documented provenance of every part in markets that are willing to pay a premium. But commercial items are very price sensitive. If DoD mandates parts traceability without a way to recover costs, it risks driving more commercial suppliers out of the defense market.
What happens next?
On the industry side, USPAE is planning a series of forums and smaller meetings to continue engagement with the DoD and explore these issues in more detail. We have also sent a Request for Information to industry organizations throughout North America to capture insights that the DoD needs to shape future solutions, policies, and program priorities. IPC, the electronics manufacturing association, will continue its advocacy for government programs to reinvigorate the entire electronics supply chain; to drive investment in “leapfrog” technologies for the factories of the future; and to support industry-based training programs and “Trusted Supplier” standards.
For its part, the DoD said it has expanded its discussion of microelectronics to include the entire ecosystem, including the companies that design, manufacture, and assemble printed circuit boards. Several DoD attendees plan to engage with industry through USPAE and the Defense Electronics Consortium to better understand and address key issues. The DoD also is considering how to evolve its trusted supplier programs and developing a supply chain risk management tool to assign risk to electronic components.
All in all, it was a spirited and productive two-way interchange about critically important, under-addressed industrial base issues. The participants’ commitment to further dialogue and joint efforts augurs well for the electronics industry in the months and years ahead.
To learn more and get involved, visit www.USPAE.org.
Speakers at the USPAE Member Meeting with DoD included:
- Arsenio “Bong” Gumahad II, Director, C4ISR/OUSD (A&S) and Interim Director of the Defense Microelectronics Cross-Functional Team
- Craig Herndon, DoD Executive Agent for Printed Circuit Board and Interconnect Technology
- Ken Lebo, Senior Support Staff, Technology and Manufacturing Industrial Base, Office of the Undersecretary of Defense Research and Engineering
- Michael McGrath, Principal Consultant, McGrath Analytics
- Rich Meade, Chairman of Prime Policy Group
- Chris Mitchell, Vice President of Global Government Relations, IPC
- Chris Peters, Executive Director, U.S. Partnership for Assured Electronics
- Adele Ratcliff, Director, DoD Industrial Base Analysis and Sustainment
- Alison Smith, Defense Microelectronics Cross-Functional Team, Workforce Development Lead
- Roger Smith, DoD Executive Agent for Printed Circuit Board and Interconnect Technology, Navy Technical Lead