From all of us here at IPC, we hope you are continuing to stay safe and healthy as summer vacations wind down and COVID-19 concerns continue.
It’s been a busy summer here at IPC, with policy debates heating up across the globe. In Washington D.C., the U.S. Congress adjourned for its August “District Work Period,” but not before the U.S. Senate passed a major bipartisan infrastructure package, which we believe would positively affect our industry.
We’re now anticipating heavy action this fall on the infrastructure bill plus the federal budget, high-tech R&D funding, cyber security, and more.
Read on for highlights of our work around the world over the past month, as well as new opportunities for you to get involved in industry advocacy. If you have any questions or would like to learn more, please contact me and/or subscribe to IPC's weekly Global Advocacy Report.
IPC Welcomes U.S. Senate Passage of Infrastructure Bill
The talk of the town in Washington D.C. this summer has been infrastructure. After a long negotiation period, the Senate approved a $1 trillion bipartisan infrastructure bill, giving electronics manufacturers fresh reasons to be optimistic. IPC welcomes the prospect of historic investments in America’s roads, ports, electric grids, and digital networks, in part because America’s infrastructure depends on cutting edge, reliable electronics. During a time when we’re still grappling with the effects of COVID-19, this bipartisan bill will help drive growth in the overall economic recovery, including the electronics industry.
However, while this critical legislation addresses the nation’s much-needed infrastructure modernization, IPC is concerned that reinstating Superfund excise taxes on 42 chemicals and raw materials—some of which are building blocks of electronics manufacturing—will increase costs for U.S. electronics manufacturers and raise prices for many consumer goods, including many of the materials that will be utilized in America’s infrastructure investment. We will be joining with other groups in engaging on this legislation.
IPC Advocacy Continues on Bolstering Entire Electronics Supply Chain
On another front, IPC continues to advocate for bolstering the entire electronics supply chain, not just parts of it.
In July, IPC sent a letter to the Senate Commerce, Science, and Transportation Committee, urging them to explicitly state support for electronics manufacturing in pending tech and competitiveness legislation. IPC supports the U.S. Innovation and Competitiveness Act (USICA), which includes the Endless Frontier Act, as it would boost investment in federal R&D in 10 high-tech fields. It’s a promising sign that federal R&D is a top bipartisan priority, but there are further steps that must be taken to ensure U.S. electronics manufacturing is not left by the wayside as it historically has been.
Specifically, IPC thinks the bill should list electronics manufacturing alongside semiconductors as a “key technology focus area.” Doing so would position the United States to build more of what it designs. Without the changes we suggest, the USICA would not advance this critically important objective and would fail to address critical supply chain vulnerabilities that the White House Supply Chain Report identified.
That report was the culmination of the Biden administration’s 100-day supply chain review, and IPC was pleased to see it address the importance of the electronics supply chain. Among its major recommendations were steps to strengthen U.S. semiconductor manufacturing and ensure the availability of minerals critical to electronics manufacturing. Multiple passages of the report reflected IPC’s input and the need to bolster the entire electronics supply chain, even if it was not the primary focus of the report.
We expect the Senate’s USICA bill will now be reconciled with House-passed legislation to arrive at a unified package for the president’s signature later this fall.
In case you missed it, IPC President and CEO John Mitchell discussed the Biden administration’s efforts to strengthen the U.S. supply chain in a recent op-ed in Roll Call.
Congress Signals Support for More Lead-Free R&D
The summer months also saw progress on an issue IPC has long-engaged in on Capitol Hill—the need for more R&D on lead-free electronics in mission-critical applications.
In a step forward for U.S. taxpayers, defense readiness, and the electronics industry supply chain, the U.S. House Appropriations Committee recently approved a $706 billion defense spending bill for FY 2022, which included $7.5 million sought by IPC to reduce U.S. Department of Defense (DoD) reliance on lead-based electronics.
To date, Congress has provided a combined $15 million for this R&D in FY 2020 and FY 2021. In a very challenging budget environment, the $7.5 million House figure signals continuing congressional interest in funding this project through completion. IPC will continue to advocate for strong lead-free R&D funding in the Senate version of the FY22 defense spending bill. More details of our ongoing lead-free advocacy are available in a December 2020 IPC Blog post.
IPC’s Latest Economic Trends Report
Meanwhile, the global economic environment remains unsettled. Many industries continue to be plagued by supply chain disruptions, and the electronics industry is no exception. Although these pressures are expected to ease in the coming months, IPC believes supply chain disruptions will continue to reverberate throughout the economy, and the electronics industry, well into next year.
According to IPC Chief Economist Shawn DuBravac, the biggest risk factor facing the current economic environment is the reemergence of COVID-19, particularly the highly contagious Delta variant which is now circulating widely in much of the world. In the United States, cases are rising and, most alarming, hospitalizations are accelerating. Globally, all eyes remain on the trajectory of COVID cases, which could stymie economic activity.
Be sure to check out IPC’s most recent Monthly Economic Outlook Report for the full picture on U.S. and European economic growth; employment, consumer, and manufacturers’ sentiment; manufacturing capacity utilization; and end markets for electronics.
DoD’s CMMC Review to Address Compliance Cost After Industry Concerns
Compliance costs for small and medium-sized enterprises (SMEs) will be a focal point of the DoD’s Cybersecurity Maturity Model Certification (CMMC) review, Federal News Network reported. IPC had made the case in an industry report—and provided input to a congressional committee—that CMMC compliance costs and burdens could drive many SMEs, including some IPC members, out of the defense industrial base.
Notably, just 32% of IPC survey respondents said they expect to be ready to undergo a CMMC assessment in one to two years, and fewer than half of respondents felt they were “very” or “extremely” familiar with CMMC compliance. Read a full statement on the issue from IPC President and CEO John Mitchell at ipc.org.
Environmental Regulators Remain Busy in the United States
As expected, it's been a busy summer for regulators at the U.S. Environmental Protection Agency (EPA).
The EPA issued a proposed rule on June 28 that would require all manufacturers and importers of per- and polyfluoroalkyl substances (PFAS) to report information regarding the “uses, production volumes, disposal, exposures, and hazards” of the chemical substance. PFAS has a history of use in electronics, and IPC will be preparing comments in response to this proposed rule during the 90-day comment period.
At the state level, Maine became the first state to enact a strict ban on products made with “intentionally added” PFAS chemicals. The law imposed a 2030 deadline to eliminate most uses of PFAS in products and will require companies to notify regulators of products they sell in Maine that contain PFAS, including the purpose and use of each substance.
And closing out what was a busy month, the EPA announced on June 30 it will be reviewing the first 10 risk evaluations of certain chemical substances to ensure all populations are protected from unreasonable risks associated with these substances, several of which are used to manufacture electronics. IPC will continue to monitor the EPA’s progress in this review and any subsequent risk management actions.
Stay tuned to our weekly newsletter and reach out to our resident environment and health expert Kelly Scanlon for more ways to get engaged in our environment and health advocacy efforts.
Interested in Chemical and Product Regulations in Europe?
Environmental regulatory developments are also heating up in Europe.
On July 15, five EU countries announced they would be submitting a proposal that would ban the manufacture, sale, and use of PFAS under Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) regulation. If the restriction proposal is adopted, then manufacturers, importers, distributors, and retailers would be banned from all uses of PFAS except those determined to be essential.
Another hot topic in Europe right now is the EU’s Circular Economy Action Plan (CEAP), one of the core tenets of the European Green Deal. The CEAP intends to address issues like the life cycle of products, sustainable consumption, and waste prevention. IPC shared comments recently on the European Commission’s public consultation on its Sustainable Products Initiative, a key component of the CEAP. We believe that any sustainable product legislation should focus on final electronics products with the greatest environmental impacts and the greatest potential for circularity improvements. The initiative will revise and expand the Ecodesign Directive and will address the presence of harmful chemicals in electronics and ICT equipment, among other products. Read IPC’s full comments on our website.
Following that, IPC and the International Electronics Manufacturing Initiative (iNEMI) held a joint webinar—the final one in a three-part series—on eco-design for a circular electronics economy. The series featured eco-design leaders sharing insights on the best and most innovative practices used today. If want to be involved in this conversation, we encourage you to share your experiences with extended reliability assessments with iNEMI, which recently formed a team to better enable circular economy principles. Registration closes in early September, and the project is set to begin soon thereafter.
Help IPC’s Advocacy Team Help You!
IPC continually seeks to better explain our sector to non-technical audiences, and we are working to expand our inventory of photos and infographic-style illustrations. You can help IPC help you by letting us know of any existing or potential sources of original artwork you know of related to electronics manufacturing. We would welcome any input from our community; let’s leverage the power of the IPC network to meet this need.
Finally, to our U.S. IPC members: Please take a minute to visit IPC’s online Advocacy Center and register to participate in upcoming campaigns to educate the U.S. Congress on our key issues. It’s fast, easy, and important.
Please send us a message if you have any insights on what you think governments should be doing to support our industry’s long-term growth and evolution.
With your continued help, IPC will continue to advocate for the electronics manufacturing industry before key audiences. As we move forward from Q3 to Q4 and beyond, we intend to keep up our momentum.
- “Biden’s promising bid for strong supply chain risks falling short,” by John Mitchell, rollcall.com, July 6, 2021.
Chris Mitchell is IPC’s VP of global government affairs. Contact him at ChrisMitchell@ipc.org.