President Biden on Monday issued a presidential determination to the secretary of defense waiving certain requirements of the Defense Production Act (DPA) to address shortfalls in the industrial base for printed circuit boards and related packaging.
The presidential determination follows a February 2021 executive order from Biden to strengthen U.S. industrial supply chains in a number of areas including semiconductors, strategic materials, advanced packaging and more. Printed circuit boards (PrCBs) are used in electronics, including weapons and other systems used by the DoD.
The March 27 memorandum says that “without Presidential action under section 303 of the Act, United States industry cannot reasonably be expected to provide the capability for the needed industrial resource, material, or critical technology item in a timely manner.”
A DoD spokesman told Defense Daily the determination will use its DPA Title III authorities to invest in microelectronics capacity “to prevent further erosion of domestic PrCB suppliers’ capabilities and ensure the U.S. has the necessary capability and capacity to support national defense systems.”
“The rapid changes occurring within the microelectronics industry make it imperative for the Department of Defense to ensure this critical sector can support the nation’s defense needs,” Anthony De Stasio, director of the Manufacturing Capability Expansion and Investment Prioritization (MCEIP) office within DoD, said in a statement. “The Presidential Determination will allow the DoD to use additional tools to ensure the resilience of American microelectronics manufacturing.”
The MCEIP office prioritizes and addresses supply chain challenges identified by the department and determines the appropriate authorities to address critical shortfalls. The office also works with domestic industry through engagements and investments.
Biden’s directive demonstrates the importance his administration sees in having trusted sources for basic microelectronics but also comes with risks, a defense industry expert cautioned.
“In practical terms, this means the administration believes that some of the less glamorous parts of information technology manufacturing are an important capability to maintain within trusted supply chains,” Greg Sanders, deputy director and fellow with the Defense-Industrial Initiatives Group at the Center for Strategic and International Studies, told Defense Daily in an email reply to questions. “The production for printed circuit boards, related goods, and the related capital equipment have faced heavy international competition, with competition from China being a particular concern. The trade-off to a declaration like today is that there’s a risk in prioritizing everything and raising costs and investments needed, thus these choices require careful consideration. In addition, the non-delegable requirement for a Presidential authorization does mean that high-level attention is necessary and it’s hard to fine tune the boundaries of such a policy. Allowing for the delegation of these determinations is a change some have proposed to make the act more flexible.”