Observed Signal · Jun 3, 2026 · Policy Update · Source: CNBC Technology · Impact: 4/5 · Sentiment: Negative
Chinese-Made PCBs Raise U.S. National Security Concerns
Nearly all printed circuit boards (PCBs) used under AI chips — including those for Nvidia and other major tech firms — are manufactured in China, creating supply-chain and national security risks for the United States. U.S. Defense Department officials warn that compromised PCBs could enable data exfiltration or weapon failures, and the Pentagon is requiring most defense purchases come from domestic factories. The U.S. share of global PCB production has fallen sharply (from ~30% to about 4% per the PCBAA). Policymakers are considering subsidies and legislation (including the Protecting Circuit Boards and Substrates Act offering a 25% tax credit and a House companion bill proposing $3 billion in grants) to boost U.S. capacity. Public U.S. PCB makers TTM Technologies and Sanmina are expanding production amid rising prices and demand.
Shifts in PCB sourcing, DoD procurement requirements, and proposed federal incentives directly affect AI hardware supply, national security, manufacturing capacity, and costs for major tech and defense buyers — a material industry issue.
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Key Takeaways & Evidence Grounding
- Nearly all AI circuit boards for Nvidia and others are made in China, creating supply-chain and national security risks.
- The U.S. Department of Defense is requiring most of its PCB purchases to come from domestic factories due to security concerns.
- U.S. share of global PCB production fell from about 30% to roughly 4%, according to the Printed Circuit Board Association of America (PCBAA); PCBAA says six of 10 PCBs are now made in mainland China.
- Senators introduced the Protecting Circuit Boards and Substrates Act in May offering a 25% tax credit for American-made circuit boards; a House companion bill proposes $3 billion in grants; both are under consideration.
- TTM Technologies and Sanmina are the only two public companies making PCBs in the U.S.; TTM shares rose ~500% over the past year and Sanmina’s stock has more than tripled. PCB prices rose by up to 40% from March to April per a Goldman Sachs note; TTM announced price increases of 5%–25%.
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