With the rapid rise in demand for AI servers and high-performance chips, printed circuit boards (PCBs), a component that has long been relegated to a behind-the-scenes role, are becoming a new focus of attention for the United States. CNBC reports that the U.S. has significantly insufficient domestic manufacturing capacity in this area, while global supply is highly concentrated in China, putting both supply and security pressures on the expansion of the AI industry and defense procurement.
China accounts for a high proportion of supply.
PCBs are fundamental components connecting chips to complete systems, and almost all electronic devices rely on them. The report cites data from the Printed Circuit Board Association (PCBA) stating that the US share of global PCB production has decreased from approximately 30% to 4%, with about 60% of PCBs currently produced in mainland China.
U.S. officials believe this reliance is not only a supply chain issue but also involves security risks. Because circuit boards are complex structures made of multiple layers of laminated materials, tampering with the manufacturing process could allow for the insertion of malicious components, data theft, and even disruption of weapon systems. The U.S. Department of Defense has already mandated that most related procurement be shifted to domestic factories.
AI and military industries are both vying for production capacity.
The report points out that the number of domestic PCB manufacturers in the United States is limited, with only two publicly traded companies: TTM Technologies and Sanmina. As demand for AI hardware rises, these companies are experiencing rapid order growth, but military and commercial customers are competing for limited production capacity.
The ongoing conflicts in the Middle East and Ukraine are also increasing pressure on raw materials. Tightening supplies of key materials such as copper and resin are driving prices up. The report, citing Goldman Sachs data, stated that PCB prices rose by as much as 40% between March and April. TTM had previously also indicated that it was raising prices for some products by 5% to 25%.
- The US share of global PCB production capacity has fallen to 4%.
- Approximately 60% of PCBs are manufactured in mainland China.
- The proposed bill would provide a 25% tax credit.
The United States promotes subsidies and tax incentives.
To expand domestic manufacturing, members of both parties in the U.S. Congress have introduced supporting bills. The Senate version proposes a 25% tax credit for companies that purchase U.S.-made circuit boards; the House bill proposes $3 billion in subsidies for U.S. PCB manufacturers.
These measures align with the US policy direction of expanding AI manufacturing and reducing reliance on China. The report mentions that TTM is building a new factory in Syracuse, New York, and advancing a larger-scale project in Wisconsin to increase domestic production capacity.
Circuit boards become a bottleneck in AI infrastructure.
In the industry chain, after wafers are manufactured and packaged into chips such as GPUs, they still need to be mounted onto substrates or PCBs before they can enter server and terminal systems. A company executive stated bluntly in the report, "Chips cannot exist in mid-air"; without circuit boards, the entire system cannot function.
As the performance improvement of individual chips slows down, more computing power is relying on multi-chip collaboration and more complex system connections, which further increases the importance of high-end PCBs. The report cites data from research firm Prismark Partners, stating that the global PCB market is expected to grow by 12.5% this year, reaching nearly $96 billion, and is projected to rise to $123 billion by the end of this decade.
This means that the competition surrounding AI chips is no longer limited to GPUs themselves, but extends to the underlying materials, substrates, and circuit board manufacturing capabilities.
