U.S. Pushes 25% PCB Tax Credit as China Makes 60% of Circuit Boards
Updated
Updated · CNBC · Jun 3
U.S. Pushes 25% PCB Tax Credit as China Makes 60% of Circuit Boards
2 articles · Updated · CNBC · Jun 3
Summary
Washington is tightening AI hardware sourcing after the Pentagon moved to require most defense PCB purchases from U.S. factories and lawmakers proposed new incentives for domestic production.
Security officials say Chinese-made circuit boards create an opening for hidden components or code that could siphon data, degrade systems or even misdirect weapons in flight.
The push comes as U.S. PCB capacity has fallen from 30% of global supply to 4%, while mainland China now produces six in 10 boards and domestic makers struggle to meet AI and military demand.
Congress is weighing a 25% tax credit for buyers of American-made boards and a House proposal for $3 billion in grants, while TTM and Sanmina expand U.S. plants despite higher costs.
Prices are already rising—Goldman Sachs cited PCB increases of up to 40% from March to April—as AI demand, wars in the Middle East and Ukraine, and raw-material bottlenecks squeeze supply.
Will the high cost of secure, American-made circuit boards cripple U.S. competitiveness in the global AI race?
As the U.S. onshores PCB production, can it escape dependency on China's control of raw materials?
The 25% PCB Tax Credit: Can U.S. Policy Overcome China’s Lead and Supply Chain Risks?
Overview
The U.S. government has introduced the Protecting Circuit Boards and Substrates Act to boost domestic printed circuit board (PCB) manufacturing. This move comes after decades of declining U.S. market share and growing dependence on foreign providers, especially China. The heavy reliance on imports has raised national security and economic concerns, prompting a strong push to diversify supply chains and reduce risks. By prioritizing local production, the U.S. aims to strengthen its industrial base in critical technologies like microelectronics and remain globally competitive, reflecting a broader desire among leaders to bring manufacturing back home.