Printed circuit boards are essential components in nearly all electronic devices, including those used in artificial intelligence. Currently, about 30% of the world's PCBs were produced in the U.S., but this figure has plummeted to just 4%. This decline raises national security concerns, as the U.S.
Defense Department has mandated that most of its PCB purchases come from domestic sources to mitigate risks of malicious components. The U.S. government is considering subsidies and tax incentives to encourage domestic PCB production, coinciding with rising tensions with China over AI technology.
Companies like TTM Technologies and Sanmina, the only publicly traded PCB manufacturers in the U.S., are experiencing significant growth, with TTM's stock soaring nearly 500% over the past year. However, they are struggling to meet the increasing demand from both the AI sector and military needs, exacerbated by geopolitical conflicts affecting raw material supplies.
PCB prices have surged, with TTM increasing prices by 5% to 25% to compete with AI demand. The global PCB market is projected to grow significantly, reaching nearly $96 billion this year. Legislative efforts are underway to support U.S. PCB manufacturing, including a proposed 25% tax credit for American-made circuit boards and $3 billion in grants for manufacturers.
The urgency to bolster domestic production is underscored by the potential risks associated with relying on foreign-made PCBs, which could be compromised and pose threats to national security and defense capabilities