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38 4 3 2 1 Four Policy Decisions for Advanced Electronics The passage of the U.S. CHIPS and Science Act was a testament to the fact that U.S. policy- makers can still work on a bipartisan basis to tackle complex and daunting challenges, but building a more robust, domestic ecosystem for advanced electronics will require four key policy decisions. Invest in advanced packaging capacity. The CHIPS Act makes $39 billion available over five years for government investments in manufacturing capacity. Much of this funding will go to sili- con fabricators, but at least nine figures should be earmarked for advanced packaging segments including IC-substrate fabrication and final component assembly and test, with a focus on build- ing short-term capacity both organically and through foreign investment or partnerships. Invest in research and development. The U.S. is 10 to 20 years behind its peers in advanced pack- aging, especially IC-substrate fabrication. Playing catchup is a losing strategy, so the U.S. needs to invest in leapfrogging technological advancements. Fortunately, the CHIPS Act allocates $2.5 bil- lion for advanced packaging R&D, funds that should be used to support innovations in equipment, materials, and processes that support advanced electronic interconnection. Promote supply chain partnerships instead of supplier relationships. Component makers and their suppliers need to see each other more as partners than as customers and suppli- ers. Partners support each other's success; customers too often seek the lowest price even if it weakens the supplier's ability to remain solvent and invest in new capabilities. In the con- text of rising geopolitical tensions and global supply chain risks, customers and suppliers are dependent upon each other's success, and the business relationships should reflect this fact. Make strategic decisions on what we are building and for whom. The global electronics supply chain has largely moved out of the United States and allied nations in Europe. Bringing it all back is highly unlikely. Instead, the U.S. government needs to determine what items need to be made in the U.S. and allied countries—either for strategic autonomy or security purposes—and then focus on building capabilities accordingly. As global competition for semiconductor leadership intensifies, the CHIPS Act is a bold move on the part of the United States. But those billions are a drop in the bucket in the context of over- all private sector investment in the industry. As the U.S. government begins to make decisions on how best to invest its limited dollars, the focus needs to be on leveraging these funds to maximum effect and steering investment into long-term, sustainable industries. The only way to do this is by complementing investments in silicon with investments in advanced packaging, the driving force for innovation in microelectronics. ADVOCACY turn page for more! By Chris Mitchell, IPC VP Global Government Relations

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