U.S. flags Chinese PCBs under Nvidia

U.S. officials are focusing on a part of the AI hardware stack that rarely gets public attention: the printed circuit boards beneath Nvidia’s chips. CNBC reported on June 3 that Washington has raised security concerns about Chinese-made PCBs used under AI processors as demand for those systems accelerates. The concern comes as the Trump administration has also been tightening export controls on advanced AI chips and trying to reduce U.S. dependence on Chinese manufacturing. ### What exactly is the part under scrutiny? Printed circuit boards are the hardware layers that connect, route and support components inside servers and AI systems. CNBC reported that the boards sitting beneath Nvidia AI chips are drawing scrutiny because they are often produced in China-linked facilities, even when the headline component — the GPU itself — is designed in the United States or fabricated elsewhere. (cnbc.com) Nvidia’s most advanced AI processors, including Blackwell systems cited in recent U.S. export-control guidance, are the visible part of the market. The less visible board and substrate layers matter because they are part of the final hardware package that goes into data-center servers. CNBC said U.S. officials are worried those layers could create vulnerabilities. (cnbc.com) ### Why are U.S. officials worried about boards, not just chips? The U.S. government has spent much of the past two years tightening access to advanced AI chips for Chinese entities. On May 31, the Commerce Department issued guidance saying license requirements for advanced chips apply to entities headquartered in China even when they operate outside China, after what CNBC described as a year-old loophole. (cnbc.com) That focus on chips leaves another pressure point in place if the supporting hardware still runs through China-linked manufacturing. CNBC reported that demand for printed circuit boards is booming and that Washington is trying to stimulate domestic production to move away from reliance on China. The White House said in a January action on semiconductors that the United States has become dependent on foreign sources for semiconductors and related products needed to meet domestic demand. (cnbc.com) ### How dependent is the United States on foreign PCB production? The Printed Circuit Board Association of America said this month that the U.S. share of global PCB supply has fallen from 30% to 4% over the past 30 years. The group backed newly introduced Senate legislation aimed at reshoring PCB and substrate production. The Department of Defense has already put money into the sector. (cnbc.com) In 2024, the Pentagon announced a $30 million award to TTM Technologies to expand domestic PCB manufacturing capacity and prototype development in the United States. ### What does this say about the export-control strategy? Commerce’s May 31 guidance showed the administration is still trying to close routes by which advanced Nvidia and AMD chips could reach Chinese firms through overseas affiliates. (pcbaa.org) CNBC reported that one chip-industry source estimated the number of advanced chips exported through that opening may have been in the hundreds of thousands. (war.gov) The PCB issue points to a different problem: a chip can be restricted at the border while other critical hardware layers remain tied to China-linked production. That is an inference from the two developments, not a stated government conclusion, but it is consistent with CNBC’s reporting on PCB concerns and Commerce’s separate effort to tighten chip rules. ### What happens next in Washington? (cnbc.com) Senators have introduced the Protecting Circuit Boards and Substrates Act, which industry backers say would provide a 25% tax credit for U.S.-made PCBs and a $3 billion grant program for domestic manufacturing. Industry groups including PCBAA are using the bill to press for a broader U.S. supply-chain response beyond semiconductors alone. The next milestone is likely to be on Capitol Hill. (cnbc.com) The PCB legislation gives Congress, the Commerce Department and electronics manufacturers a concrete vehicle for deciding whether U.S. AI policy will keep focusing mainly on chips or extend more aggressively into the hardware layers underneath them. (atlaspcb.com)