IPC Welcomes New Senior Director of Sales

IPC announces the addition of Michael Stone as senior director of sales to its staff at IPC headquarters in Bannockburn (Chicago), Ill.

As IPC’s senior director of sales, Stone is responsible for managing IPC’s sales efforts and growth goals. Essential functions of his role include planning, reporting, sales process optimization, sales training, sales program implementation, and recruiting and selection of IPC’s sales team talent.

A seasoned leader with more than 25 years of experience in sales management, account development and building highly effective sales teams, Stone was most recently vice president, non-profit sales at Liturgical Publications Inc. where he was responsible for leading all facets of the non-profit sales department to promote revenue growth and account level profitability.

“Mike is a passionate sales leader who has built and developed highly effective sales teams during the course of his career,” said Brian Knier, IPC vice president of member success and chief marketing officer.

“Mike has embraced the successful sales leader philosophy of clearly understanding his organization’s mission, and dedication to providing the exceptional customer value with every interaction. We are thrilled to welcome Mike to the IPC team.”

Stone can be reached at MikeStone@ipc.org or + 1 847-597-2866.

United States Increases Tariffs on More Chinese Products

by Chris Mitchell, IPC vice president, global government relations

The U.S. Trade Representative (USTR) has published the official Federal Register notice increasing tariffs from 10 percent to 25 percent on another $200 billion worth of Chinese products, effective at 12:01 a.m. on Friday.

Meanwhile, the USTR also has added more products to the list of exclusions from the first round of tariffs. The list includes numerous codes for items used in manufacturing, including spools of aluminum and steel and coils; push-button switches; DC electric motors and AC electric motors.

U.S. and Chinese officials have met regularly since January to resolve long-standing trade issues with the goal of de-escalating trade tensions and easing the tit-for-tat tariff increases that took effect last year.

Officials from both countries have reported progress in negotiations over the past few months, but the U.S. posture changed abruptly last week. U.S. officials, according to news reports, felt that Chinese officials had “backtracked” on key commitments, including IP and technology transfer reforms. In response, President Trump personally decided to increase tariffs this week.

Meetings between senior U.S. and Chinese trade officials are scheduled to resume today. We are unlikely to see an agreement this week, as had been the goal.

President Trump has suggested that he may also impose new or increased tariffs on all Chinese products imported into the U.S., but a decision that bold would hinge on the President’s estimation of whether a deal can get done and what pressure is necessary to strike it.

The Chinese have promised retaliatory tariffs.

As always, please contact me if you have concerns, insights or questions.

Export Controls in Flux

By Ken Schramko, senior director, North American government relations

U.S. export control rules have changed significantly over the last decade, and more changes are expected as policymakers tackle the treatment of new and foundational technologies and respond to geopolitical developments.

To help electronics companies comply with these rules and stay abreast of developments, IPC recently held three training workshops in California, Illinois, and Virginia, with the California and Virginia workshops sponsored and hosted by TTM Technologies.

Featured speaker Gary Stanley – president of Global Legal Services, PC, and one of the nation’s top legal experts on export controls – gave an in-depth presentation that covered the International Traffic in Arms Regulations (ITAR), Export Administration Regulations (EAR), and Defense Federal Acquisition Regulation Supplement (DFARS) cybersecurity, with a focus on printed circuit boards and electronics.

Among the key points that Gary stressed were the following:

• Correctly determining the commodity jurisdiction (State Dept./ITAR versus Commerce Dept./EAR) and the commodity classification (U.S. Munitions List versus Commerce Control List) is the most critical step in complying with U.S. export controls, because only then will you know what licensing requirements apply.

• Communicate, communicate, communicate! Open lines of communication within your company’s functional areas, e.g. legal, sales, procurement, IT, HR, as well as you’re your customers and suppliers, is essential to avoiding export control mistakes.

• Measures relating to Trusted Suppliers, DFARS cybersecurity, and export controls certainly overlap, but each regulatory area has its own special requirements.

• The most effective export control managers typically display intellectual curiosity, attention to detail, extroversion, and political skills. The last trait is important because export control managers must occasionally say “no” to their CEOs and colleagues, while maintaining their cooperation and support.

The workshops also featured remarks by Special Agents from the U.S. Department of Commerce’s Bureau of Industry & Security, Office of Export Enforcement, who addressed, among other things, “red flags” to be aware of when approached by a potential customer, especially if that potential customer is new, foreign, and/or unknown to your company.

Other speakers at the workshop presented on IPC-1791, Trusted Electronic Designer, Fabricator and Assembler Requirement; supply-chain risk management within the U.S. Department of Defense printed-circuit-board supply chain; and the DoD Executive Agent for Printed Circuit Board and Interconnect Technology.

It is the responsibility of the company to understand all export control rules and regulations and ensure that they are in compliance. That’s why IPC will continue to make educational opportunities available on this topic, and why we encourage you to ensure that your company has solid export-control-compliance measures in place.

Engineer Connects Education, Industry and IPC

By Corey Lynn, Marketing Manager, Education

As the IPC Education Foundation establishes student chapters, we have partnered with individuals in the electronics industry and academia. Sometimes we get lucky and find someone involved in both. Kris Moyer, lead engineer at Williams International, is an IPC veteran who chairs and participates in several IPC Standards Committees. Moyer is also a part-time professor focused on PCB design at Sacramento State.

A chance encounter between Moyer and IPC President and CEO, John W. Mitchell led to a partnership in developing an online, instructor-led Introductory PCB Design course offered through IPC. The first class just ended. The next class starts on May 7 and is open for registration. The six-week online IPC PCB Design Fundamentals course utilizes interactive webinars, on-demand recorded class sessions, job-specific exercises, and team projects to facilitate mastery of the key concepts required by circuit board designers. IPCEF took the opportunity to ask Moyer about his experience teaching his first IPC class.

Moyer responded, “It’s very rewarding to give back to the next generation of board designers by teaching PCB design both at the university level through Sacramento State University as well as through the new IPC EDGE training portal. I have been able to successfully design and build PWBs and CCAs for some of the most extreme environments and a lot of that knowledge flows directly from IPC’s standards and certification activities.”

Moyer is also the faculty advisor of our first IPC Student Chapter at Sacramento State. He partnered with student Scott O’Hair, an IPC Emerging Engineer, to start the chapter with O’Hair as the first IPC student chapter president.

Scott O’Hair added, “My experience as an IPC Emerging Engineer really expanded my knowledge of the electronics industry. I received a lot of insight from my mentors and attending IPC APEX EXPO give you the chance to see some impressive technology in action. The networking events can open up career opportunities as well and I wanted to share those benefits with my fellow students.”

The Sacramento State IPC Student Chapter was the first of six chapters launched during IPC APEX EXPO 2019. Aaron Birney, IPC’s manager of education programs, describes IPC Student Chapters as “a way for students to engage IPC members and learn about real-world manufacturing processes, make connections within the industry, and lay the groundwork for internships.”

The IPC Education Foundation, a 501©(3) organization, focuses on strengthening and shaping the emerging workforce by providing educational opportunities, connecting the emerging workforce with industry opportunities, improving the perception of the industry, and offering scholarships to deserving students.

For more information on the IPC Education Foundation, contact Birney at AaronBirney@ipc.org or visit www.ipcef.org.

IPC’s PCB Technology Trends Study Details How PCB Manufacturers Meet Current and Future Technology Demands

PCB Technology Trends 2018, a new global study published by IPC is now available. The survey-based study shows how printed circuit board (PCB) manufacturers are meeting today’s technology demands and looks at the changes expected by 2023 that will affect the whole industry.

Based on data from 74 companies worldwide, the 213-page report presents data on PCB technology and OEMs’ PCB requirements as of 2018, as well as OEMs’ use of emerging technologies. Predictions from both industry segments indicate what these measurements are expected to be five years into the future.

The data on OEMs’ use of emerging technologies showed that more than half of those surveyed are currently making products that communicate with the Internet of Things and three quarters make products that depend upon sensor inputs. By 2023, more than half of the reporting OEMs expect at least some of their products to incorporate artificial intelligence and more than one-third expect to make products that interface with humans via neural networks.

Interesting regional differences emerged on the use of blind vias, which are more commonly specified by OEMs in North America and Europe than in Asia. The use of stacked vias by PCB fabricators is also more prevalent in Asia today, but fabricators in all regions expect the use of stacked vias to grow, displacing staggered vias. Asian PCB fabricators are also leading the way in the use of printed electronics, which is expected to grow in all regions by 2023.

Data on board properties cover thickness, layer count, density, line width and spacing, via diameters, aspect ratios, I/O pitch, via design, blind and buried vias, and thermal properties. Use of materials looks at rigid, flexible, stretchable, metal core, loss characteristics and surface finishes. The PCB industry’s use of special structures covers embedded components and chip packages, and its use of printed electronics includes 3D printing and e-textiles. Survey participants’ comments on compliance and technical challenges and trends are included. In addition, the data in the report are segmented by two regions — North America and Europe in one segment, and Asia in another segment — and by two types of products — installed and mobile.

PCB Technology Trends 2018 is available to IPC members for $675 and $1,350 for nonmembers. For more information or to purchase the report, visit IPC’s Online Store.

Every Day is a Good Day to Focus on Worker Health and Safety

by Kelly Scanlon, director, EHS policy and research

This week marks the annual observance of World Day for Safety and Health at Work, coordinated by the International Labor Organization (ILO). According to a recent report from the ILO, approximately 2.8 million workers worldwide die each year from occupational accidents and work-related diseases, or about 7,500 per day.

In most countries, government regulations now exist to prevent such hazards, although many of those rules are not as cost-effective as they should be. Indeed, recognizing the benefits of leading the way and going beyond mere compliance, many companies have created cost-effective systems for continuous improvement in environmental, health and safety (EHS) performance. We’re proud that IPC members such as Raytheon and Lockheed Martin Missiles & Fire Control have been recognized as being among “America’s Safest Companies” by EHS Today.

As a longtime leader in environmental, health and safety (EHS) issues, IPC supports the need for practical policies and regulations that prevent work-related hazards and exposures, and we offer several helpful resources for our members.

For example, the IPC Environmental, Health & Safety (EHS) Committee – under the leadership of Bret Bruhn of TTM Technologies – promotes cleaner, safer manufacturing worldwide through information exchange, assistance with regulatory compliance, and advocacy for practical, internationally consistent legislation and regulations.

If you or anyone on your team has questions or suggestions concerning IPC’s work on EHS issues, please contact me at KellyScanlon@ipc.org.

You’re also invited to attend one of the IPC/ITI environmental compliance workshops in June, which will cover California Prop 65, the EU Circular Economy Strategy, EU RoHS, EU REACH Directive, EU plastics initiatives, and environmental restrictions in southeast Asia.

After all: Are we not all workers who deserve a safe and healthy workplace?

North American PCB Sales Growth Stays Strong, Order Growth Slows

IPC Releases PCB Industry Results for March 2019

BANNOCKBURN, Ill., USA, April 29, 2019IPC — Association Connecting Electronics Industries® announced today the March 2019 findings from its North American Printed Circuit Board (PCB) Statistical Program. Year-over-year growth in March was strong for sales but slipped into negative territory for orders, while the book-to-bill ratio retreated to parity at 1.00.

Total North American PCB shipments in March 2019 were up 19.1 percent compared to the same month last year. Year-to-date sales growth as of March was 16.4 percent. Compared to the preceding month, March shipments jumped 32.9 percent.

PCB bookings in March decreased 0.9 percent year-over-year, bringing year-to-date order growth down to a positive 2.4 percent. Bookings in March were up 10.1 percent from the previous month.

“Strong sales for the North American PCB industry in March, combined with lackluster order growth, brought the book-to-bill ratio down to 1.00, its lowest level in more than two years,” said Sharon Starr, IPC’s director of market research. “Year-over-year sales growth has outpaced order growth for the past 10 months, indicating the likelihood of slowing sales growth in the coming months.”

Detailed Data Available
The first-quarter 2019 edition of IPC’s North American PCB Market Report, containing detailed data from IPC’s PCB Statistical Program, will be published by mid-May. The quarterly report presents detailed findings on rigid PCB and flexible circuit sales and orders, including separate rigid and flex book-to-bill ratios, growth trends by product types and company size tiers, demand for prototypes, sales growth to military and medical markets, and other timely data. This report is available free to current participants in

IPC’s PCB Statistical Program and by subscription to others. PCB companies that are IPC members doing business in North America are invited to contact marketresearch@ipc.org for information about participating. More information about this report can be found at www.ipc.org/market-research-reports.

Interpreting the Data
The book-to-bill ratios are calculated by dividing the value of orders booked over the past three months by the value of sales billed during the same period from companies in IPC’s survey sample. A ratio of more than 1.00 suggests that current demand is ahead of supply, which is a positive indicator for sales growth over the next three to twelve months. A ratio of less than 1.00 indicates the reverse.

Year-on-year and year-to-date growth rates provide the most meaningful view of industry growth. Month-to-month comparisons should be made with caution as they reflect seasonal effects and short-term volatility. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month might not be significant unless a trend of more than three consecutive months is apparent. It is also important to consider changes in both bookings and shipments to understand what is driving changes in the book-to-bill ratio.

IPC’s monthly PCB industry statistics are based on data provided by a representative sample of both rigid PCB and flexible circuit manufacturers selling in the USA and Canada. IPC publishes the PCB book-to-bill ratio at the end of each month. Statistics for the current month are normally available in the last week of the following month.

03_19 IPC BOOK-TO-BILL GRAPHS

IPC APEX EXPO 2019: Hear from the Attendees

IPC APEX EXPO 2019, where technology’s future came to together with 9,796 attendees from 56 countries and 440 exhibitors from around the world. Join us in San Diego for IPC APEX EXPO 2020!

U.S. Tax Law Boosts Growth, But Uncertainties Loom

By Chris Mitchell, vice president, global government relations

Monday, April 15 was the deadline for millions of Americans to file their income tax returns, so this is a good time to review the Tax Cuts and Jobs Act of 2017 (TCJA) as well as the current tax policy landscape and how these rules are affecting the electronics industry.

TCJA Fostering Economic Growth

In passing the TCJA, Congress restructured the U.S. tax code for the first time since 1986. IPC applauded the bill’s passage because of the need to replace an outdated tax code with one that promoted competitiveness and innovation in our industry and economy-wide.

Several provisions were especially important to the electronics industry, including:
• Lowering the corporate tax rate from 35 percent to 21 percent;
• Allowing full and immediate expensing of capital investments placed in service between September 27, 2017 and January 1, 2023; and
• Safeguarding the R&D tax credit.
• The bill also allows many small businesses that are organized as “pass through” companies to claim a 20 percent deduction for the non-wage portion of pass-through income.

These provisions have helped generate stronger-than-expected GDP growth and near record-low unemployment. In fact, the number of U.S. job vacancies has exceeded the number of unemployed Americans for months. Most economists are forecasting continued growth through 2019.

Changes Coming in a Few Years

Even as we celebrate the success of the TCJA, we should be mindful of work yet to do and new issues that have come up. Here are a few that affect our industry:

Bonus Depreciation Starts Ramping Down in 2023. The TCJA provided for 100 percent bonus depreciation for capital expenditures, spurring investments in plant and equipment. However, the law phases out bonus depreciation from 2023 to 2026. Bonus depreciation enjoys wide support on Capitol Hill, so there will be attempts to prevent its expiration. Some skeptics believe bonus depreciation is more appropriate as a tool for reversing economic downturns, while others say it is accelerating automation and jeopardizing jobs. We expect a tough fight to extend this provision past 2023.

R&D Tax Credit Falls Short. Beginning in 2022, companies will be required to amortize R&D expenses over five years instead of claiming an immediate, full deduction as they do today. There are concerns that this will reduce R&D investment, and some in Congress are working to rewrite this provision. Moreover, a cadre of Congress members will continue to fight to increase the alternative simplified R&D credit from 14 percent to 20 percent to bring it in line with international competitors. But such an increase is considered unlikely.

TCJA Regulations Still Pending. Significant portions of the tax law require the Treasury Department to issue implementing regulations, but many such rules are still in the proposal stage. Regulations can undergo significant changes as they go through the process, so IPC and its members will need to keep an eye on them and be prepared for further advocacy.

Pass-throughs (S-Corps) Still Face Unfair Treatment and Significant Uncertainty. Pass-throughs have long argued for tax parity with C-Corps, and the authors of the TCJA sought to provide some relief by granting a 20 percent deduction on some pass-through income. However, legislative rules prevented Congress from making the relief permanent, and the deduction will vanish at the end of 2025. Because pass-through tax rates are tied to individual rates, any debate over changing them will get caught up in the political battle over marginal tax rates for individuals.

Expiring Tax Provisions in Limbo. No sooner had the TCJA passed in 2017 than congressional efforts began to pass an “extenders packages” to reinstitute several old tax provisions that were left out of the bill. Currently, there are 29 so-called extenders that expired in 2017 and 2018, and we are beginning to see bipartisan interest in passing an extensions bill later this year. The two provisions with the most support are the biodiesel tax credit and the short-line rail maintenance credit. We will continue to monitor developments.

TCJA Exacerbates Budget Woes. The TCJA may be boosting economic growth, but it is not paying for itself. Tax revenues are falling below forecast, and the Trump administration’s FY2020 budget proposes $1 trillion+ annual deficits through FY2022. And that is a best-case scenario!

Planning Ahead

The TCJA made some very helpful changes to an outdated tax system. However, the tax writers also created a great deal of uncertainty by putting a time limit on some of the most significant and popular provisions, which are likely to expire in a few years absent a resurgence of bipartisanship. We know that many IPC members make long-term business decisions based on the tax code. Thus, your company may want to consider taking advantage of TCJA tax provisions while they last and working with IPC to advocate for smarter, more predictable tax policies in the future.

IPC Working to Revive R&D on Lead-Free Electronics in High-Reliability Sectors

by Chris Mitchell, IPC vice president, global government relations

Ask yourself the following question: Why is it that the aerospace, defense and high performance (ADHP) electronics sectors remain reliant on lead solders and components even as the commercial sector has largely phased out their use?

The short answer is that lead-free electronics do not offer the performance and reliability assurances that the ADHP sectors require, but the longer answer is that key stakeholders, including government entities, have not invested in the science to understand how to achieve symmetry and interchangeability between lead and lead-free electronics.

IPC is working to change that and we need your help.

Essential R&D Delayed by Budget Cuts

Over the last 15 years, the commercial electronics industry has largely phased out its use of lead (Pb) in the manufacture of electronic components and circuit assemblies. The transition to Pb-free electronics was driven by the European Union’s Restriction of Hazardous Substances Directive (RoHS), which placed new restrictions on the use of lead in commercial products.

Though initiated in Europe, RoHS has had a global impact on the electronics industry. Other countries have followed Europe’s lead and manufacturers are now obligated to eliminate the use of lead in their goods for markets around the world.

The migration to Pb-free electronics has been successful in the commercial markets, but the ADHP electronics sectors have been slower to abandon the traditional tin-lead solder used in the production of components and circuit assemblies. ADHP products have more demanding performance requirements than consumer electronics; they need to perform flawlessly in harsh environments and in safety-related applications; and there is not enough data on the performance of Pb-free products to support the move.

Enter the Pb-Free Electronics Risk Management (PERM) Council, comprised of subject matter experts from government, industry, academia, and other stakeholders. Founded in 2008 and housed by IPC since 2012, the PERM Council provides leadership and coordination of Pb-free electronics risk management activities in both government and industry.

A major focus of the PERM Council has been gathering enough detailed engineering knowledge to underpin the conversion from tin-lead solder to Pb-free in the ADHP sectors. In 2009, PERM supported an effort funded by the U.S. Department of Defense (DoD) to identify the knowledge gaps and estimate the cost to fill them. The cost estimate this “Pb-Free Manhattan Project” was about $110 million over three years, broken down into more than 100 “bite-size chunks” from $100,000 to $5 million.

Unfortunately, due to DoD budget cuts in the last decade, the “Manhattan Project” was never fully funded, although some companies and universities continued to work on the smaller chunks. In 2014, IPC completed a “re-baseline” and estimated that about $40-50 million was still needed to complete the knowledge base. To date, the R&D project is still incomplete.

Now, in 2019, IPC and a consortium of manufacturers and academic institutions are working with more than a dozen congressional offices to secure $15 million in federal funding to put the R&D back on track. The formal funding requests have been filed; congressional deliberations on defense spending are underway; and Congress is expected to send a defense appropriations bill to the president for his signature by late summer, at which time we will know whether we have been successful.

A great deal of policymaker education and advocacy will be necessary to achieve this goal in 2019 and to keep the momentum going in 2020 and beyond. The IPC Government Relations team will be working on the issue 24/7, but members of Congress are most interested in hearing from IPC members, i.e. the front-line business leaders in their states and congressional districts.

To learn more and contribute your expertise to IPC’s Pb-free electronics efforts, please visit the PERM Council page on IPC’s website and contact me at ChrisMitchell@ipc.org to join our Advocacy Team.