Electronics Manufacturing

In 2019, the U.S. generated nearly seven million tons of electronic waste, only 15% of which was recycled. The rest ended up in landfills. According to Earth911.com, a recycling database, the value of the raw materials contained in this unrecycled e-waste was approximately $7.49 billion. This waste of costly materials isn’t just bad for the planet, it’s bad for business too, and companies are taking notice. E-waste recycling has long been important to a company’s image, but now there are real financial benefits as well.

Today, electronics manufacturers are taking steps to claw back useful materials from their discarded electronics, helping both the environment and their bottom line. Several major manufacturers now accept expired electronics for recycling, including Apple, Dell, Microsoft, and Samsung. And all these manufacturers have programs in place that allow them to benefit from almost every stage of the recycling process.

Refurbish and Resell: The Easiest Type of E-Waste Recycling

Both Apple and Dell allow customers to trade in their old devices when they buy a new one. Consumers get a modest credit to put towards a new device, and the manufacturers get a product they can refurbish and sell at a profit. Of course, some of these devices are so out of date that they can’t be refurbished. In this case, the consumer doesn’t earn any credit towards a new device, but most customers still feel good about turning in the product for recycling, and this generates a sense of goodwill towards the manufacturer.

Take-back programs benefit both consumers and the environment. They also boost the corporate image of the electronics manufacturers who run these programs, since by refurbishing electronic devices for resale, these companies can rightfully claim that they’re helping to ease the strain on landfills. And now, thanks to improving technology and innovative revenue-sharing programs, e-waste recycling programs are also benefitting the profit margins of these electronics manufacturers.

Repurposing Components

Not every device that gets turned in for recycling can be updated and resold. In these instances, manufacturers partner with an e-waste recycler to recapture some of the value of these used electronics.

The first step in recycling an electronic device is to pull out those components that can be repurposed “as is.” All the major recyclers harvest usable components from old electronic equipment before sending the leftovers to be recycled. Keyboards, screens, hard drives (wiped clean, of course), processors, memory units, and motherboards can all be given a second life in a new device.

It takes time and skill to remove an individual component from an electronic device. And then the recaptured part must be cleaned, checked for functionality, and packaged for sale. But the labor-intensive effort is worth it. A server’s hard drive, for example, can fetch $300 on the secondary market.

And where are these hard drives, motherboards, and other parts sold? Most go to wholesalers, but if you shop for electronics components on eBay, you may have bought one of these repurposed parts.

Large recyclers have revenue-sharing arrangements with their Fortune 500 customers, in which both parties split the proceeds from the sale of these repurposed parts. In this way, electronics manufacturers continue to capture value from their products, even at the end of their lifecycle.

Extracting Raw Materials

Some electronics components, like smaller hard drives, simply can’t be repurposed. These pieces get broken down and shredded, along with the shell of the original electronic device. At this stage, electronics manufacturers don’t typically benefit directly from the recycling process, but the indirect gains are substantial.

In addition to batteries, electronic components contain a lot of hazardous elements, like mercury, cadmium, and lead. And when electronic devices don’t get recycled, these elements end up in landfills, where they leach into soil and ground water. Take-back programs like the ones run by Apple and Dell let these companies credibly claim that they are doing their part to reduce the amount of hazardous materials in the environment.

And there are financial benefits as well. According to the United Nations, more than $10 billion of precious metals is dumped each year in the world’s electronic waste. “Losing” metal in this way drives up the cost of making new electronics. Diverting electronics from landfills and reusing the essential components keeps valuable metals from being wasted, which has a dampening effect on their cost.

And there’s another trend that’s sure to lower the cost of these key raw materials. Scientists have been busy finding ways to extract precious metals from recycled e-waste.

Recovering Precious Metals

According to the Environmental Protection Agency, one metric ton of circuit boards can contain 40 to 800 times the amount of gold and 30 to 40 times the amount of copper mined from one metric ton of ore in the U.S., which means some landfills have higher concentrations of precious metals than typical mining facilities. Traditionally, extracting gold and other metals from electronics has been a laborious process, which is why right now only about $4 billion of precious metals are recaptured from e-waste every year.

But a new process, developed by engineers at Rice University, is changing the extraction landscape. The technique involves grinding up electronics and then flash-heating them with a zap of electricity to vaporize the metals. The metallic gases are then vented away into separate chambers, where they coalesce back to their natural state as they cool.

According to a 2021 article in ScienceDaily, this new extraction method uses 500 times less energy than traditional methods, and produces a byproduct that’s “clean enough for agricultural land.” This new development reduces the need for hazardous and polluting mining operations while increasing the availability of precious metals, thus lowering their cost. It also encourages the recycling of electronic waste, even if that e-waste is already sitting in a landfill, a development that leads ScienceDirect to predict a rise in “urban mining.” As one of the scientists who developed the technique says, “The treasure is in our dumpsters.”

This is good news for companies that rely on rare earths and precious metals to build their products, especially electronics manufacturers, who gobble these metals at a high rate.

Making Plastic Cheaper through E-Waste Recycling

After an electronics product has been fully “demanufactured” and had all its valuable and/or hazardous components removed, everything that’s left of the original product—mostly plastic and some metal—gets shredded. After this material is shredded, large magnets pull metal from the debris as it passes on a conveyor belt, leaving only plastic, which will be further processed in a plastics compounder, then shipped to an electronics manufacturer and used to make new products.

Modern techniques have brought down the price of recycled plastic, but even so, right now recycling the type of plastic used to make computers and other electronics is an extremely difficult process. That’s because, unlike a soda bottle, which is made of a single polymer, the plastic used for electronic products is made of a complex polymer blend, which makes it difficult to recycle.

But a recent development bodes well for a further drop in the cost of recycled plastic. Researchers at the Illinois Sustainable Technology Center have discovered a nontoxic solvent that can recover polycarbonates, a group of thermoplastic polymers found in the plastic components of many electronic devices. The hope is that once the technology becomes more widespread, recycling a phone case will be as easy as recycling a soda can. It will also be easier to turn phone cases into soda bottles, and vice versa. This is great news for electronics manufacturers, who use more than 10 million tons of plastic every year.

Looking Towards the Future

E-waste recycling benefits electronics manufacturers financially, and generates customer goodwill. Given these benefits, electronics companies can gain further advantages if they make their products easier to recycle. Fortunately, there are several steps that manufacturers can take to achieve this.

Another way to support easy recycling is to make individual components easier to reach. Some electronics devices are like black boxes, sealed tight with glue and proprietary screws. This not only frustrates consumers—hence the rise in “right to repair” laws—it also makes recycling unnecessarily arduous. That’s one reason why companies like Dell are changing the design of their products, making them easier to open up.

Building an E-Waste Recycling Program

Electronics companies looking to squeeze more revenue from their existing product lines should take a look at their recycling options. A comprehensive take-back program can create a reliable revenue stream, through both whole product and component resales. And the benefits of recycling are more than just monetary.

Now more than ever, consumers pay attention to a company’s ecological footprint. A 2022 study in ScienceDirect found that consumers not only prefer greener products, they also perceive these products as being of higher quality. Committing to the use of recycled materials, and making it easier to recycle discarded electronics, can cement a company’s reputation as a green leader. A well-planned, well-publicized e-waste recycling program brings far-reaching PR benefits to any company.

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Electronics manufacturing is on the cusp of a new era with the advent of organic semiconductors. With environmental regulations tightening, and consumers demanding green products, innovative manufacturers are discovering new, eco-friendly ways to make transistors and other semiconductors. These companies seek to tap into Mother Nature’s reserves to replace traditional components with easy-to-recycle materials. In addition, forward-looking manufacturers are developing new processes that are designed to lower energy costs, and use solvents that are far less toxic, making regulatory compliance easier.

The Building Blocks of Organic Semiconductors

Most of today’s semiconductors use a silicon wafer as the substrate (base material). Germanium is also used sometimes, but less commonly. Though silicon is nontoxic, it’s also in short supply, driving manufacturers to seek alternatives.

Glass, it turns out, is an ideal substrate for many types of semiconductors, and it’s become a popular choice for manufacturers. As with silicon, it can be used in chips that don’t require flexibility. With its low surface roughness, glass is a highly efficient choice and an abundant substitute for silicon.

But while glass is an environmentally friendly option, that may soon be a moot point. Both glass and silicon are rigid materials, and today’s new devices require chips that are flexible. And unfortunately, the most popular flexible substrate right now is plastic.

Biodegradable Flexible Electronics

Imagine a computer screen that you can unroll, or a solar panel that bends to fit the gables of a roof. These are just some of the coming applications made possible by flexible electronics. Already, this technology is being used to make car dashboard displays that curve and fitness trackers that wrap around the wrist.

These new devices—including wearable electronics, medical sensors, and solar cells—require ultra-light and ultra-small components. This is causing many manufacturers to move away from traditional silicon chips to semiconductors that use a more flexible substrate. Currently, plastic is the most popular choice. But from an environmental standpoint, plastic substrates are a step backward. Plastic materials may have ushered in new electronics applications, but they also contribute to environmental pollution when the devices they make possible are eventually discarded.

Fortunately, organic alternatives have emerged in recent years that can effectively replace plastic. Polymers like paper and cotton have proven to be effective and inexpensive conductors. Best of all, these renewable, natural materials are compatible with the roll-to-roll manufacturing that makes flexible electronics possible. Now, a paper substrate can be combined with other natural materials to make a semiconductor that’s both flexible and easily recycled—or even designed to biodegrade after a certain amount of time.

Eat Your Transistor

Traditional semiconductor manufacturing techniques rely on multiple toxic substances, including cadmium, tellurium, gallium, mercury, and arsenic. These elements are hazardous to both people and the environment. Even more concerning, research shows that the metallic particles used in semiconductor production can remain in finished products such as solar panels, where they can be picked up during handling and deposited on skin, or even inhaled. Replacing these substances—which can be found in the chemical compounds used as solvents—is a priority for those companies determined to produce nontoxic semiconductors.

Fortunately, innovative researchers are making progress in this area, developing organic substitutes for both semiconductor components and solvents. Some of these substitutes are found in common foods. Beta carotene, for example, has been utilized as a p-type semiconductor in organic transistors. Glucose and caffeine are also used in organic semiconductors. All of these materials have the advantage of low cost and high biodegradability.

Green Solvents: A Key Ingredient in Sustainable Manufacturing

Creating a semiconductor involves multiple complex processes: patterning, deposition, planarization, etching, cleaning, and doping. Some of these processes involve the use of hazardous chemicals like toluene, acetone, methylene chloride, xylene, chloroform, isopropyl alcohol, and glycol ethers.

These chemicals can be caustic and hazardous to humans. Many are known human carcinogens, and some of them—such as glycol ethers—are believed to cause reproductive harm. The use of these chemicals is one reason why semiconductors currently generate significant pollution during their manufacture.

But now a company in Germany called Merck KGaA (not affiliated with the pharmaceutical company) is setting out to change that. They’ve recently developed a green alternative to two highly toxic cleaners used in semiconductor manufacturing: N-methylpyrrolidone (NMP) and tetramethylammonium hydroxide (TMAH). The company is now looking to find eco-friendly alternatives to other harsh chemicals used in chip creation—urged on by semiconductor manufacturers who are trying to “green” the manufacture of their chips.

Soft Electronics: Brought to You by Organic Semiconductors

Replacing current substrates and semiconductor components with green alternatives—and doing the same for the harsh chemicals typically used in chip manufacture—is poised to usher in a new type of semiconductor that’s completely biodegradable.

Biodegradable electronics, also known as soft electronics, are expected to lead to an explosion in electronics devices designed to be worn or inserted into the human body. Soft electronics have predictable lifespans, and so naturally lend themselves to novel applications in the field of medicine. Using soft polymers, biodegradable metals, and other organic materials, researchers have created implantable medical devices that naturally dissolve and disappear over time, eliminating the need for removal surgery.

The field of soft electronics is new, but the number and type of devices being developed is growing—all of it made possible by organic semiconductors.

The Future of Semiconductors

The technology industry has long been accused of contributing to climate change by making products that gobble large amounts of energy during their lifetime. Now the industry is being called out for its manufacturing processes as well. On that front, at least, the future looks promising. Organic semiconductors are just the innovation that electronics manufacturers need to help them meet their sustainability goals.

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A 2020 survey by Boston Consulting Group found that 74 percent of consumers are willing to pay more for products that come in sustainable packaging. And 60 percent of consumers surveyed said they were less likely to buy a product if the packaging was not environmentally friendly. Electronics manufacturers are becoming increasingly aware of this consumer preference, and that awareness is driving the popularity of sustainable packaging materials.

Companies that provide green packaging can credibly claim to be environmental stewards and are viewed favorably by consumers. In addition, recyclable or biodegradable packaging is seen as forward-thinking and innovative—a positive association that can benefit electronics manufacturers, whose products must be perceived as original and inventive.

Consumer preference isn’t the only factor driving the trend in sustainable packaging. Governments, too, are demanding an end to plastic use. In California, a new law requires all packaging to be recyclable or compostable by 2032. And while certain plastics may be considered recyclable, the law was written with the specific goal of greatly reducing single-use plastic, and shifting the burden of plastic waste from consumers to companies—which is exactly what many consumers want.

Given these factors, switching to green packaging sooner rather than later can give electronics companies a competitive advantage. So why do some manufacturers hesitate?

According to Raconteur, 43 percent of brands cite cost as an obstacle to sustainable packaging. Over the past several years, however, the supply and diversity of environmentally friendly materials has increased dramatically, driving down costs and increasing options. Today, companies that choose to use green packaging materials have a wealth of options to choose from. Here are five of the most popular.

Cardboard – The Original Sustainable Packaging Material

Cardboard is one of the oldest of the eco-friendly packaging options. It’s been in use for decades, is easy to repurpose, and easy to recycle. And if the material comes from sustainable forests, then the carbon footprint for this material is low. In addition, used cardboard can be shredded, and gain new life as packing filler. And if the inks on the cardboard are also sustainable, the entire package can be composted.

Mushroom Packaging

Not just for spaghetti sauce anymore, mushrooms are one of the newest sustainable packaging materials to come on the market. To make this type of packaging, agricultural waste products like corn husks are first molded into the desired shape. Then mycelium—the part of a fungus that acts as its roots—is grown around the mold, binding the waste into a solid, break-resistant container. The containers take only seven days to grow, and can be made in bespoke shapes to fit just about any type of product, from small electronic devices to large appliances.

Bamboo – A Fast-Growing, Eco-Friendly Packaging Material

Bamboo is famous for its fast renewal rate—the plant grows up to one inch an hour. In addition, the plant is naturally strong, used for centuries to make everything from eating utensils to furniture. And now some electronics companies are using it for packaging. Dell Computer, for example, touts this “eco-friendly cushioning” to consumers, and claims to be the first in the electronics industry to make packaging from renewably sourced bamboo. While bamboo does not decompose as rapidly as other materials—it can take up to six months in a composting bin—it does not release any toxic materials into the environment as it breaks down, making it a reliable and popular choice among both consumers and manufacturers.

Cornstarch-Based Foam

Foam packaging made from cornstarch is one of the most eco-friendly packing materials on the market. It’s sometimes referred to as “the new polystyrene” because it so perfectly mimics the traditional packing material. It even looks like polystyrene, and like the product it’s meant to replace, it can be made to order in any shape you need. For consumer products like electronics, cornstarch foam alone is all that’s needed for safe shipment. And once the product has been delivered, the consumer can dispose of the packing foam by composting it or dissolving it in water. Or the foam can simply be tossed in the trash, to safely biodegrade in the local landfill.

Seaweed – A Sustainable Packaging Material You Can Eat

According to the National Oceanic and Atmospheric Administration, eight million tons of plastic enter the world’s oceans every year, so it’s appropriate that one of the solutions to plastic pollution comes from the ocean itself. Growing up to one meter per day, seaweed is highly sustainable. It doesn’t compete with food crops, doesn’t need fresh water or fertilizer, and as an added bonus, it actively contributes to de-acidifying the ocean. Seaweed is now being used to make wraps, bottles, and other types of containers. The material is highly biodegradable, so much so that many of the containers made from it are in fact edible.

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According to the United Nations, 50 million tons of consumer electronics are thrown away every year. Discarded devices are the fastest-growing component of municipal waste. In addition to releasing toxic chemicals into the environment, this e-waste also adds tons of hard-to-recycle plastics to our landfills every year. But the tide is starting to turn. Savvy electronics companies are investing in sustainable manufacturing—and gaining kudos from their customers for doing so.

The increasing volume of e-waste has made headlines both domestically and abroad, influencing consumer preferences. Now more than ever, people are seeking electronic devices that are built with eco-friendly materials, have a low carbon footprint during their lifetime, and can be sustainably disposed of. Many cutting-edge manufacturers are responding to this consumer demand by adopting new materials and techniques.

“Many electronics companies are seeking to develop more eco-friendly products,” says Tony Lopez, Vice President of Manufacturing and Logistics Services at PRIDE Industries. “Fortunately, the technologies that make sustainable devices possible continue to drop in cost, making them an increasingly viable option for these manufacturers.”

Sustainable manufacturing is on the rise, driven by trends in both consumer preferences and government regulations. Because of these trends, companies that adopt green practices are finding that they can not only reduce their environmental footprint, but also save expensive resources, and secure a public relations advantage. Here are seven developments that electronics companies would be wise to keep in mind.

Sustainability in Manufacturing Requires Transparency

It used to be that companies could satisfy customer demands for sustainability by simply labeling their products “recyclable.” But as a Guardian article last year pointed out, today’s savvy customers—whether governments, businesses, or individual consumers—require proof, and will shift their purchasing dollars to companies that can assure them that their products are indeed made sustainably. Because of this, third-party certifying agencies are becoming more important. Some third-party organizations, like CDP and CSRHub, now rate most large companies, whether or not these companies submit information. Now more than ever, it’s important for manufacturers to implement sustainable lifecycle management of their products, and to share their green initiatives with rating agencies and the public.

Manufacturing Design with Sustainability in Mind

According to the European Commission, 80% of a product’s environmental impact is determined by its design. A product’s design determines the raw materials used, the amount of energy the product will consume over its lifecycle, and how easily the product can be recycled at the end of its life. The ability to easily recycle electronics is especially important, given the valuable resources contained in the typical electronics product, including glass, aluminum, and precious metals. More and more, consumers want to know that the products they use can be easily recycled, and products that are made with recycled materials are viewed favorably by these same consumers. This is why, for example, in 2022 Apple Computer boasted that 20% of the materials used in its products were recycled. Companies that design their products with sustainability goals in mind reap PR benefits—and, in some cases, tax breaks as well.

The Right to Repair Movement

Most Americans believe that if they buy something, they should be able to do whatever they want with it—including fix it. This belief, combined with a growing awareness of e-waste, is fueling today’s “Right to Repair” movement. And smart companies are responding to this growing consumer demand by taking a cue from the Maytag repairman; they’re touting their products’ reliability and ease-of-repair. Both Dell and HP have received kudos from consumers for making manuals and spare parts available, and even Apple and Microsoft are making the interiors of their products easier to access.

In the past, electronics manufacturers have sometimes acted like the point of sale was the end of the product lifecycle. But perhaps a better model is provided by car dealerships, where money is made on the initial sale, and subsequent revenue streams come from keeping the product in top shape.

Consumer-Friendly, Green Packaging

It’s official, consumers hate hard plastic packaging, so much so that there’s a name for this particular dislike. It’s called wrap rage, and it’s defined as the frustration one feels when trying to open a plastic clamshell or other hard plastic container. In 2006 and 2007, Consumer Reports even issued “Oyster Awards” to companies whose packaging was particularly hard to open. Although the award was meant to be a joke, it highlighted a serious problem: In 2006, the U.S. Consumer Product Safety Commission (CPSC) estimated that injuries from plastic packaging resulted in approximately 6,000 emergency-room visits annually. These days, hard plastic packaging is disliked for other reasons as well—it isn’t biodegradable. For these reasons, the plastic clamshell is thankfully going away, increasingly replaced by customer-pleasing, easy-to-recycle options like cardboard, molded pulp, and green cell foam.

Recycling Plastic from Electronic Devices

Another plastic associated with electronics comes from the products themselves. Unlike a soda bottle, which is made of a single polymer, most plastic used for electronic products is made of a complex polymer blend, which makes it notoriously difficult to recycle. That’s finally starting to change, thanks to researchers at the Illinois Sustainable Technology Center. The scientists there have discovered a nontoxic solvent that can recover polycarbonate, a group of thermoplastic polymers found in the plastic components of many electronic devices. The hope is that once the technology becomes more widespread, recycling a phone case will be as easy as recycling a soda can.

Recovering Precious Metals

Electronics are made using a host of precious and semi-precious metals, including gold, silver, copper, and palladium. And when these devices end up in landfills, a wealth of raw materials is lost. According to the Environmental Protection Agency, one metric ton of circuit boards can contain 40 to 800 times the amount of gold and 30 to 40 times the amount of copper mined from one metric ton of ore in the U.S., which means some landfills have higher concentrations of precious metals than typical mining facilities. Traditionally, extracting gold and other metals from electronics was a laborious process. But recently, engineers at Rice University showed that precious metals and rare earth minerals could be recovered by grinding up electronics and flash-heating them with a zap of electricity. This process makes recovering precious metals from e-waste easier and less expensive, which could cut down on new mining operations, as well as open new revenue streams for recyclers.

Energy-Efficient Semiconductors

According to a recent article in electronicsforu.com, global electricity demand is projected to increase by 30 percent in the decade ending in 2030. Many experts argue that this level of consumption is not sustainable. Fortunately, new developments in electronics should help mitigate the rise in energy consumption. One of these innovations is the use of silicon carbide and gallium nitride instead of traditional silicon for semiconductors. This “wide bandgap” technology reduces heat and power dissipation, increasing the energy efficiency of a broad range of devices. And the innovations keep coming. A new material being tested by researchers at MIT, cubic boron arsenide, conducts thermal energy nearly ten times more efficiently than silicon. New materials like these won’t just save consumers money, they’ll also shrink the carbon footprint of many electronic products. That’s good for the consumer, and good for the planet.

Sustainable Electronics Manufacturing

The days of designing electronics products without considering sustainability are gone. Today’s manufacturers know that to attract consumers and, increasingly, conform with environmental regulations, they must design products that consume less energy, use fewer chemicals in construction, and recycle more easily. Fortunately, researchers are rising to the challenge, discovering new ways to reduce the carbon footprint of electronics throughout the entire product lifecycle. The future of electronics looks bright—and energy efficient.

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“Many electronics companies are seeking to develop more eco-friendly products.”

—Tony Lopez, Vice President of Manufacturing and Logistics Services at PRIDE Industries

Are you following H.R. 7677?

This bill—otherwise known as Supporting American Printed Circuit Boards Act of 2022—could boost the electronics manufacturing industry.

H.R. 7677 seeks to increase production of printed circuit boards, or PCBs, within the United States.

It would do so by providing “incentives for the domestic production of printed circuit boards, and for other purposes,” according to congress.gov.

Additional purposes include investment in factories, training, and further research and development.

Why Does H.R. 7677 Matter?

PCBs are considered as essential to electronics manufacturing as semiconductors. They are vital to national security and critical for medical equipment, vehicle manufacturing, etc.

Semiconductors have recently secured federal support from the CHIPs and Science Act of 2022.

But industry leaders argue that securing the supply chain for electronics manufacturing requires a holistic focus on semiconductors as well as PCBs.

At present, the United States lags behind other producers of PCBs.

Despite maintaining 30 percent of PCB share in 2000, the United States now produces 4 percent of PCBs, according to IPC, a trade association for electronics manufacturing.

China, meanwhile, produces about half of all PCBs worldwide.

What’s the Proposed Budget for H.R. 7677?

If approved, the legislation would earmark $3 billion for PCB investment in fiscal year (FY) 2022. Funds would remain available through FY 2023.

Individual awards would be capped at $150 million, “to the extent that such use meets the national security needs or enhances the economic competitiveness of the United States,” according to the legislative text.

Who’s Behind H.R. 7677?

Rep. Anna Eshoo (D-CA) and Rep. Blake D. Moore (R-UT) introduced the legislation in May.

Co-sponsors include:

Dina Titus (D-NV)
Lucille Roybal-Allard (D-CA)
Frank J. Mrvan (D-IN)
Tim Ryan (D-OH)

The trade association IPC also backs H.R. 7677.

“This bipartisan legislation, if passed, will stimulate critical investments in PCB research and manufacturing in the United States,” says IPC President and CEO John Mitchell.

“We’re glad to see so many industry leaders agree and join us in urging congressional support for this bill.”

More than 100 industry leaders have also signed a letter of support for H.R. 7677.

Does PRIDE Industries Support H.R. 7677?

As an experienced provider of electronics manufacturing services within the United States, PRIDE Industries supports H.R. 7677.

“Protecting domestic production of PCBs is a matter of national security,” says Tony Lopez, Vice President of Manufacturing and Logistics, at PRIDE Industries.

“As a country, we need to continue investing in domestic electronics manufacturing. Passing H.R. 7677 would be a very positive step.”

Lopez oversees a team of engineers, including many who are certified by the Surface Mount Technology Association (SMTA). The team provides engineering services to a manufacturing factory that produces printed circuit board assemblies, cables and cable harnesses, and medical devices.

“We take domestic manufacturing seriously,” Lopez says. “It’s why we support our engineers in becoming SMTA-certified, which includes higher-level training in PCB manufacturing. The future of US manufacturing depends on making these skills and capabilities a national priority.”

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Want to produce more PCBs with skilled US teams? Our team of SMTA-certified process engineers can help. Contact us today.

“As a country, we need to continue investing in domestic electronics manufacturing. Passing H.R. 7677 would be a very positive step.”

—Tony Lopez, Vice President of Manufacturing and Logistics, at PRIDE Industries

US Semiconductor Manufacturing and the CHIPS Act

The CHIPS Act (Creating Helpful Incentives to Produce Semiconductors) is part of an effort to increase national security by strengthening the supply of critical technologies. The act is designed to provide “investments and incentives to support U.S. semiconductor manufacturing, research and development, and supply chain security.” However, faced with climate concerns, military aid for Ukraine, escalating gasoline prices, and trade with China, Congress has been slow to implement the act’s funding package—which provides the first subsidies of their kind for U.S. chip manufacturers. Meanwhile, foreign governments have long subsidized the building and maintenance of their country’s fabrication plants. Some to the tune of billions.

According to a 2020 report by the Semiconductor Industry Association (SIA) and based on the OECD’s (Organisation for Economic Co-operation and Development) 2019 Semiconductor Report, subsidies for the top foreign producers were broken down as follows:

China: $50 billion

South Korea: $26.7 billion

Japan: $5 to $7 billion

Singapore: $5 billion

Europe: $2.5 billion

Israel: $2.5 billion

Taiwan: $0.58 billion

These statistics don’t include tax incentives, discounted land, equipment incentives, workforce training, preferential loans, or hiring credits provided in each of these countries. None of which the U.S. offers its semiconductor manufacturers.

The CHIPS Act sought to change this. Delays in funding, however, are causing concern in among domestic chip manufacturers.

Is the Department of Defense’s ‘Microelectronics Vision’ Falling Out of Focus?

This June, as part of its response to the CHIPS Act, the Pentagon released its “Microelectronics Vision” report, outlining its commitment to mitigate escalating U.S. supply chain woes. The document came in the wake of last year’s formation of the Defense Microelectronics Cross-Functional Team (DMCFT) whose primary responsibility was to develop a “DoD-wide ME strategy that includes an implementation and transition plan for a sustainable U.S. [microelectronics] ecosystem . . . “

To carry this out, the DoD recently awarded $117 million to GlobalFoundaries (GF), one of the world’s leading semiconductor manufacturers. After an $8 million DoD award funded GF’s initial engineering baseline activities last year, GF is now scheduled to transfer some of its silicon-based semiconductor manufacturing processes to its Fab 8 facility in Malta, New York.

However, in a recent statement to Construction Dive, GlobalFoundaries hinted that the delay of CHIPS Act subsidies may waylay this plan. And they’re not the only semiconductor manufacturer who is concerned about the congressional delay in funding.

Manufacturers and Chip-Reliant Industries Concerned About CHIPS Act Delay

Beyond the government sector, other U.S. chip-reliant industries and manufacturers continue to grapple with shortages—with the auto, lighting, power, and consumer electronics industries most impacted. Awaiting relief through the CHIPS Act, these sectors are now also confronting Congress’s delay.

Responding to the situation, Intel CEO Pat Gelsinger recently halted the groundbreaking ceremony for the company’s Ohio mega-fab site. In his strongest statement to date on the matter, he warned that if Congress didn’t act soon, Intel would take its semiconductor manufacturing operations overseas.

Gelsinger goes on to cite the fact that European, Indian, and South Korean plants are 30- to 50-percent subsidized, while China’s semiconductor plants are subsidized up to 70 percent.

Gelsinger is not the only person to make this point. While at the World Economics Forum in Davos this May, U.S. Commerce Secretary Gina Raimondo spoke about the possibility of losing more U.S.-based semiconductor manufacturing. Following a recent trip to South Korea, where she and President Biden visited Samsung’s facility, she had this to say to CNBC: “Intel, Micron, Samsung – they’re growing. They’re going to build future facilities . . . If Congress doesn’t move quickly, they’re not going to build them in America. They’re going to continue to build them in Asia and in Europe, and we risk losing out on that.”

Will the Funding Delay Deter Asian Manufacturers?

Another major project awaiting CHIPS Act funding involves Taiwanese Semiconductor Manufacturing Company (TSMC), the world’s largest chip manufacturer. In 2020, they announced plans to build a $12B chip-fabrication plant in Arizona.

“TSMC has already begun their construction in Arizona, basically because of trust. They believe the CHIPS Act will be passed by the Congress,” said Ming-Hsin Kung, minister of Taiwan’s National Development Council, in a recent interview.

Kung added that the speed of construction will depend on CHIPS act subsidies.

Manufacturers Innovating to Mitigate Chip Shortage

While some organizations await subsidies, others are getting creative. In a widely circulated comment, Peter Wennink, CEO of the Dutch company ASML, noted that at least one unnamed conglomerate had resorted to purchasing washing machines—in order to salvage semiconductors for its products. Meanwhile, some car manufacturers are rewriting their codes to accommodate older-model chips. Even social enterprises, like PRIDE Industries, are innovating. Tasked with assembly, product testing, and supply chain management for a medical device company’s injury management system, PRIDE Industries got creative.

“We helped one of our medical device companies mitigate supply chain challenges by designing out a hard-to-source IC chip from their build, replacing it with a readily available, equivalent substitute,” said Tony Lopez, Vice President of Manufacturing and Logistics at PRIDE Industries.

Senators Weigh In

Against this backdrop, two senators are now weighing in. On July 6, Senator Andrew Brenner (R-Delaware) and Jay Hottinger (R-Newark) introduced a resolution, urging Congress to allocate CHIPS Act funding: Senate Concurrent Resolution 17.

“We have a serious shortage of computer chips needed to make everything from consumer goods to military equipment,” said Brenner. “Intel is poised to make Ohio a world-class chip manufacturing center, but we need Congress to fund the CHIPS Act in order to make this critical next step in our nation’s economic future.”

Further details on the resolution haven’t yet been released, but chip manufacturers are warning that without CHIPS Act subsidies, the U.S. will continue to fall behind foreign semiconductor manufacturers. And major players are now sending a direct message to Congress: Allocate funding or watch the U.S. chip shortage continue.

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