Issue link: https://iconnect007.uberflip.com/i/1506834
12 SMT007 MAGAZINE I SEPTEMBER 2023 of roughly $3 billion to look at R&D, on-the- job training, university training, and brick and mortar. How do we skill up as an industry for onshoring and nearshoring that will create more demand? e second part, and this is key, is a tax credit. e tax credit is for OEMs; it's not for the fab- ricators or the substrate manufacturers. is is for Google, Amazon, and others—they would receive a tax credit for every American-made printed circuit board they purchase. Now, why is that so important? One, it creates a demand signal so the fabricators and the other busi- nesses can invest, knowing that there will be a volume demand there. Two, it helps level the playing field for companies that are compet- ing directly against other countries. If another country, for example, is subsidizing a certain industry, it's hard for an American company to be competitive. at 25% tax credit will help level that playing field, and we're excited about that. Johnson: You mentioned that the tax credit should create a demand signal and trigger additional investment from PCB fabricators. Do you see action in that regard right now? From an Isola perspective, we see that some fab- ricators are growing their businesses. ey're introducing actual brick and mortar and scal- ing up for incremental capacity; people under- stand the momentum there. We are advocat- ing and educating on behalf of this industry, so what does that demand signal look like? We know that aerospace and defense, with ITAR and everything else, will remain U.S.-based, for the most part. We're trying to understand what those other critical end segments are that we want for a secure and resilient supply chain. I'm referring to areas like the medical industry, banking, and infrastructure, like 5G. If the government and private industry can sit down and identify the four or five segments where we want that resilient supply chain, it will create a demand signal. Right now, the U.S. has roughly 4% of the international global market share, but if you take those segments I just mentioned, it's roughly 26% of the global market share; the truth is probably somewhere in the middle and it's enough demand to cre- ate a sustainable industry. Just an investment from the government isn't enough to create a sustainable industry. We need that pull strat- egy that is generated from the demand signal, and we're looking forward to raising aware- ness, educating the government on those criti- cal end segments, and then getting agreement around that. Johnson: Years ago, there were many small and boutique shops doing a lot of work. PCB fabricators seemed to be everywhere. It's a much smaller market now. Do you see this investment encouraging more consolida- tion of the fabricators that are still out there? Could this new environment create new businesses? I think it's both; we're already seeing consoli- dation. In 1999, there were roughly 2,000 fab- ricators in the United States. Now, there are fewer than 200 and only 10 really ten big ones. You're seeing where larger fabricators are tuck- ing in other acquisitions, buying some of the Travis Kelly