Chinese New Year is coming... and how can we achieve parity re: PCB production in the US

I have always dreaded this time of the year because it meant you had to rush all your orders and make sure you have enough stock of PCB's and CNC parts to survive until March because the entire country of China goes on a collective vacation for two weeks in February. While I have a lot of respect for this from a human perspective, it always throws a wrench into the already frail supply chain of custom manufactured parts.

That was until the NDAA compliance requirement for small businesses that work with DoD and Federal Agencies (some state level too) and now there is a slew of other issues related to paying higher prices domestically or finding suppliers on near shores, Europe or AUKUS and dealing with longer lead times and importing headaches.

Supply Chain & Cost Factors

In China, the supply chain is highly integrated—fabs, raw material suppliers, component distributors, and assembly houses are often located within short distances of each other. This proximity cuts down on logistics complexity and lead times. Because of the sheer production volume in over there, component pricing can also be more competitive. In contrast, the U.S. supply chain can be more fragmented, and component sourcing might involve multiple vendors across various states, slowing procurement and driving up costs.

Expertise & Labor

Their PCB sector benefits from a large, specialized workforce with extensive experience in high-volume manufacturing. This concentration of expertise translates to faster iteration cycles and the ability to scale production more seamlessly. In the U.S., there is deep engineering knowledge and strong R&D capabilities, particularly for complex or high-reliability PCBs (like aerospace or defense). However, due to smaller labor pools and higher wage costs, local production can be significantly more expensive.

Lead Times, Tariffs, and High-Mix, Low-Volume Needs

For startups needing lower volumes but greater design variety (“high-mix, low-volume”), it can be challenging to get favorable pricing and turnaround times in the U.S. On the other hand tariffs on China-imported PCBs add an extra layer of complexity and cost, yet in many cases, the total landed cost (including tariffs) from China remains competitive—especially if one needs quick access to components or specialized capabilities that might not be widely available domestically. Meanwhile, U.S. fabs and assemblers often provide more transparent communication and can sometimes offer quicker rework or engineering support for smaller runs, but the lead times can still lengthen due to supply chain bottlenecks.

Conclusion

For U.S. startups caught between national security requirements and commercial realities, the path forward requires both careful planning at the company level and supportive policy measures from the government. While companies can invest in stronger domestic partnerships and robust supplier vetting, policymakers can help by expanding programs that incentivize onshore and nearshore electronics manufacturing.

A potential policy-level solution would be to extend existing initiatives, such as the CHIPS Act, to encompass PCB manufacturing and advanced assembly. This could include:

Targeted Incentives and Grants: Provide tax credits or direct grants for building and upgrading PCB fabs in the U.S., focusing on high-mix, low-volume production needed by defense startups.

Workforce Development: Invest in technical education and training programs to grow a specialized PCB manufacturing workforce, reducing reliance on foreign expertise.

Trusted Ecosystems and Alliances: Encourage partnerships between domestic fabs, assembly houses, and design firms through cooperative agreements and funding that mitigate risk and lower production costs.

By combining a robust private-sector approach with forward-thinking policies, the U.S. can foster a more resilient, secure, and cost-effective supply chain—empowering defense-related startups to innovate without compromising on compliance or competitiveness.

Have you faced similar challenges meeting NDAA or other regulatory requirements? Let’s connect and share best practices for building secure and scalable products in the defense space.