• August 1, 2023
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The Protecting Circuit Boards and Substrates Act has been introduced in the U.S. House of Representatives. 

The bill aims to provide an incentive for domestic production of PCBs with a 25% tax credit for buying boards from a U.S. manufacturer. 

It also offers other incentives for PCB manufacturing, as well as research and development, in the U.S.

But I have questions: 

Would the 25% tax credit apply to all product supplied by domestic manufacturers, including the PCBs they broker from Asia? 

Will the rebate go to the EMS company? Or will it be a pass-thru if the OEM directed the boards to be sourced domestically?

There is no doubt the incentive to buy domestically would create demand. 

But because of the current limited manufacturing capacity in the U.S., lead-time for that American-made product will extend, and pricing for that product will increase, rendering the rebate ineffective. 

While the bill aims to increase domestic PCB manufacturing, it will not have any effect for quite some time.

Yes, it would be nice to build everything domestically. But businesses need their products in a timely manner, at a cost that has no artificial government interference (higher or lower).

In fact, the current 25% tariff on PCBs from China has made little difference in offshore procurement. 

That’s because the capacity for production in the U.S. simply does not exist for getting product in a timely manner. And that’s not likely to change anytime soon.

What do you think? Let me know at greg@directpcb.com.

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