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14 The PCB Magazine • October 2014 TTM and Viasystems (recently acquired by TTM) have multiple certified facilities, so the total manufacturing site number is slightly higher. In the 2005 industry report, Linkages: Man- ufacturing Trends in Electronics Interconnect Technology, the National Research Council (NRC) determined that U.S. production of PCBs was less than 10% of the world output (whereas it had been more than 40% in the 1980s). Ad- ditionally, and for further perspective, accord- ing to a 2010 National Defense Industrial Asso- ciation (NDIA) report, Recovering the Domestic Aerospace and Defense Industrial Base, overall, the U.S. PCB industry shrunk by an estimated 74% from 2000–2010. In terms of revenue, that same NDIA report defines the significant revenue losses in U.S. do- mestic PCB output as having reduced dramati- cally from $11 billion in 2000 to less than $4 billion by 2008. Nietzsche quotes, history and bad news out of the way, there are some real reasons for op- timism in the U.S. military and aerospace seg- ments of the PCB industry. In an earlier Mil/Aero Markets column, Pen- tagon Budget Aftershocks (The PCB Magazine, May 2014) I provided actionable intelligence for your review as you develop strategies to pur- sue funded DoD programs and specific oppor- tunities in the RF/microwave sector related to electronic warfare initiatives. There are also significant legacy PCB op- portunities outlined in a prior column, Foreign Military Sales: Back to the Future for Sales Op- portunities (The PCB Magazine, March 2014). To obtain more current information specific to the military and aerospace market, I reached out in mid-September to Sharon Starr, Director of Market Research at IPC, whom I consider the foremost industry authority in defining actual market conditions. According to Starr: "IPC estimates that the military and aero- space market for PCBs accounts for about 28% of the North American PCB market. This esti- mate is based on 2013 data collected from the industry and published in IPC's 2013-2014 Analysis & Forecast for the North American PCB Industry, which will be published later this month. This represents at least $965 million. IPC's bottom-up method of estimating the size of the market produces a conservative estimate. Sales growth for rigid PCBs in North Amer- ica has been basically flat so far this year, with year-to-date sales to the mil/aero market down slightly as of July, while rigid PCB sales to other markets are up compared to the same period last year. The flexible circuit segment is seeing modest growth so far this year. As of July, mil/ aero flex sales are outperforming sales to other markets. This information is from the Septem- ber edition of IPC's North American PCB Mar- ket Report, which is published monthly." (For a deeper dive into the growth poten- tial for flexible circuits, please see the November 2013 column, The Intersection of Unmanned Vehicle Systems and Electronics Technology.) Therefore, through my interpretation of the data, a minimum of nearly $1 billion of U.S mil- itary and aerospace printed circuit manufactur- ing business will be available in 2015. For clari- fication, all of these opportunities would not be purely Mil-31032 requirements and would also be comprised of IPC Class 2 and Class 3 builds, effectively opening up the market for all U.S. based facilities that are ITAR registered and are certified to manufacture to IPC requirements. More importantly, and to provide an oppor- tunity for military and aerospace PCB growth sustainment and future growth, as we near the close of 2014 there have recently been two dramatic and long overdue legislative develop- ments driven by the IPC that will positively impact the U.S. domestic PCB industry, particu- larly the military/aerospace sector: • On July 1, 2014 the U.S. Department of State published a final rule for Category XI for Military Electronics of the United States Muni- tions List (USML). This clarifies the treatment of PCBs under International Traffic in Arms Reg- ulations (ITAR). The new rule states that PCBs "specially designed" for defense-related pur- poses will be controlled under USML Category XI. Additionally, any designs or digital data re- lated to the "specially designed" PCBs will be controlled as technical data. This is a significant victory for the IPC and its members, who have long advocated that PCB designs should remain under the jurisdiction of ITAR when the end UP, UP AND AWAY continues

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