NVIDIA PCBs linked to China supply chains

Nvidia’s AI chips sit at the center of the U.S. technology race, but CNBC reported on June 3 that printed circuit boards used beneath those chips trace back to Chinese suppliers. The report said the issue has sharpened national-security concerns in Washington because the boards are embedded deep in electronics and are difficult to replace quickly with domestic supply. On the same day, the European Commission unveiled a technology sovereignty package aimed at reducing the bloc’s dependence on foreign providers in semiconductors, cloud and artificial intelligence. Together, the two developments put hardware supply chains, not just chip design, at the center of technology policy. ### Why are printed circuit boards drawing attention now? CNBC reported on June 3 that printed circuit boards, or PCBs, used in AI systems for Nvidia and others are largely made in China because U.S. manufacturing capacity cannot meet demand. The report said PCBs sit underneath almost every chip and are a basic part of nearly every electronic device. Mike Cadenazzi, the U.S. assistant secretary of war for industrial base policy, told CNBC that “chips, substrates, PCBs represent multiple avenues of attack for a potential malicious actor.” CNBC also reported that the Defense Department requires most of its own purchases to come from the shrinking number of domestic factories because of those concerns. (cnbc.com) ### What is the supply-chain problem the U.S. is facing? CNBC said about 60% of the world’s PCBs are now made in mainland China, citing the Printed Circuit Board Association of America. The same report said the United States once produced about 30% of global PCB supply but now accounts for 4%. (cnbc.com) David Schild, executive director of the Printed Circuit Board Association of America, described that concentration to CNBC as a “risky dependency.” Former deputy under secretary of defense Al Shaffer told CNBC that PCBs are the “easiest place to disrupt an electronics chain” because components can be hidden in substrates and layers. (cnbc.com) ### What is Washington doing in response? CNBC reported that lawmakers in both chambers of Congress have introduced legislation to encourage AI companies to buy American-made boards and to expand domestic production. The proposal described by CNBC includes a 25% tax credit and $3 billion for U.S. PCB makers including TTM. (cnbc.com) April added a broader geopolitical backdrop. CNBC said the Trump administration accused Chinese entities that month of running “industrial-scale campaigns” to steal U.S. AI systems and said it would explore ways to hold foreign actors accountable. ### What did Europe announce on June 3? (cnbc.com) The European Commission said on June 3 that it adopted a technology sovereignty package to bolster the European Union’s digital autonomy. The package includes two legislative proposals — Chips Act 2.0 and the Cloud and AI Development Act — along with an EU Open Source Strategy and a Strategic Roadmap for Digitalisation and AI in Energy. (cnbc.com) The Commission said the EU currently relies on non-EU countries for more than 80% of key digital products, services, infrastructure and intellectual property. Its factsheet said the package is intended to strengthen competitiveness, strategic autonomy and supply-chain resilience while keeping much of the market open to “like-minded partners.” (digital-strategy.ec.europa.eu) ### Why do these two stories belong together? June 3 produced two separate signals from Washington and Brussels: one about boards already inside AI hardware, the other about the long-term effort to rebuild local capacity. In both cases, officials focused on the same pressure point — dependence on foreign suppliers for the layers beneath the most valuable computing systems. (digital-strategy.ec.europa.eu) The next steps are already defined. In Washington, the PCB subsidy legislation cited by CNBC will move through Congress with companies such as TTM in view. In Brussels, the Commission’s June 3 package now puts Chips Act 2.0 and the Cloud and AI Development Act before EU institutions for the next stage of the legislative process. (cnbc.com)