Printed circuit boards sit beneath nearly every chip and are required in nearly every electronic device. These are a quiet but important part of the burgeoning artificial intelligence market, and are increasingly problematic for the United States. Nvidia etc. are made in China.
Circuit boards provide all sorts of opportunities for adversaries to slip past malicious components. The vulnerability has raised serious national security concerns, prompting the Pentagon to require most purchases to come from dwindling domestic factories.
“Chips, boards and PCBs present multiple vectors of attack for potential malicious actors,” Mike Cadenazzi, the U.S. assistant secretary of the Army for industrial base policy, said in an interview with CNBC. He said that in the worst-case scenario, a compromised PCB could result in “failure of the missile in flight.”
According to the Printed Circuit Board Association of America (PCBAA), approximately 30% of the world’s printed circuit board (PCB) supply used to come from the United States, but that number has decreased to just 4%. In China, where material and labor costs are low, domestic production capacity cannot keep up with state-run manufacturers. PCBAA Executive Director David Schild said six of the 10 types of PCBs are currently manufactured in mainland China, a “dangerous dependency”.
Al Shafer, a former assistant secretary of defense who helped shape technology acquisition decisions during the Obama administration and President Donald Trump’s first term, said PCBs are “the easiest place to break the electronics chain” because of their ability to hide things in substrates and layers.
The U.S. government is currently considering subsidies to encourage domestic PCB manufacturing, and members of both the House and Senate have introduced bills that would include financial incentives for manufacturing and purchasing American-made products. These efforts coincide with rising tensions between the United States and China in the battle for AI supremacy. In April, the Trump administration accused Chinese companies of waging an “industrial-scale campaign” to steal U.S. AI systems and said it would consider ways to hold foreign actors accountable.
But national security is not the only concern. There is also not enough supply to meet the demand for AI and defense.
TTM Technologies and Sanmina are the only two publicly traded companies manufacturing PCBs in the United States. These companies are experiencing rapid growth along with the rest of the AI hardware industry. TTM stock has increased nearly 500% over the past year, while Sanmina stock has more than tripled.
Both companies are struggling to meet military needs as wars continue in the Middle East and Ukraine. The Iran war has also disrupted the supply of some key raw materials outside the region. China’s Victory Giant, a supplier to NVIDIA, one of the world’s largest PCB manufacturers, warned in April that the Middle East conflict could cause prices for key raw materials copper and resin to rise.
PCB prices rose as much as 40% from March to April, according to a Goldman Sachs memo cited by Reuters. TTM told CNBC in May that it would raise prices by 5% to 25%.
Edwin Locks, CEO of TTM Technologies, speaks with CNBC’s Katie Tarasoff on May 7, 2026 at the original factory of America’s largest circuit board manufacturer in Santa Ana, California.
Andrew EversCNBC
“We’re competing with the demand for AI,” TTM Vice President Kathy Gridley said in an interview with CNBC. “The commercial side is willing to pay a much higher price to access that capacity, which actually drives up the overall price.”
To resolve production capacity issues and help the U.S. catch up with China, TTM is rapidly expanding its domestic footprint, with a new factory in Syracuse, New York scheduled to begin production soon, and a larger factory in Wisconsin scheduled to open this year. Once operational, TTM will have seven plants in Asia, its largest still in China, and a total of 18 plants in the United States.
“Chip doesn’t float”
CNBC toured TTM’s original, state-of-the-art U.S. facility in Santa Ana, California, to see how PCBs are manufactured and find out how the U.S. is trying to catch up with China.
TTM does not disclose its customers, but CEO Edwin Locks told CNBC that the company supplies products to “big players” in the AI space. This category includes companies such as Nvidia. google and appleBecause no chip, whether it’s a tiny AirPod or a two-ton Nvidia Vera Rubin server rack, can work inside a system without being connected to a board or PCB.
The global PCB industry is expected to grow 12.5% this year to nearly $96 billion and expand to $123 billion by the end of 2010, according to electronics research firm Prizmark Partners.
According to TTM, circuit boards can be constructed from one to 140 layers and range in price from single digits to $100,000.
“Moore’s Law is coming to an end,” Locks said, referring to the 1960s observation that the number of transistors would double about every two years, providing more computing power while reducing cost. “We can’t add any more complexity to these chips, so we have to put them together, and that’s our job.”
Gridley, who oversees TTM’s aerospace and defense business, said PCBs are essential because chip technology cannot be delivered to devices without them.
“The chips don’t float,” Gridley said. “For the whole package to work properly, they must be mounted on the board.”
After the wafers come off the factory line and are packaged into large chips, like Nvidia’s graphics processing units, those chips must be attached to circuit boards that have a map of their destination printed on them.
Its “bareboard” is created by pressing many layers into a single panel, and the layers are made from rare materials such as copper and resin, and precious metals such as gold, palladium, and immersed tin.
“There are many suppliers in the U.S., such as copper foil, that have only one source of supply,” Gridley said. “And if something were to happen to that one supplier, it would paralyze the industry.”
The majority of printed circuit boards are manufactured in China, creating supply chain and national security risks. TTM, the largest U.S. manufacturer, is ramping up production of such PCBs in the U.S. (Photographed in Santa Ana, California, on May 7, 2026)
Andrew EversCNBC
More layers provide more room to create dense paths for electrical signals to pass through, allowing multiple chips to communicate with each other and send signals to a broader system. Chips and circuits are added in a separate assembly process, with each item glued to a resin substrate or melted to pads on the PCB using solder balls.
This process can take up to six months and requires large amounts of electricity and water. Globally, TTM used the electricity equivalent of 70,000 homes and 2.1 billion gallons of water in 2024. The company says it now aims to use 60% renewable energy and recycle 35% of the water it uses.
Nearly three-quarters of the PCBs manufactured at TTM’s largest single-source factory in China go to data centers. But at TTM’s California plant, 71% goes to aerospace and defense products. Starting next year, defense electronic equipment will be legally required to be imported from the United States under a new law.
Senators from both parties also introduced the Circuit Board and Substrate Protection Act in May, which would give a 25% tax credit to companies that choose U.S.-made circuit boards. A companion bill in the House calls for $3 billion in subsidies for U.S. manufacturers. Both bills are currently under consideration as part of the U.S. government’s efforts to level the playing field with Chinese companies that receive large subsidies from the Chinese government.
“Some of our adversaries have very sophisticated attack vectors,” the Pentagon’s Cadenazzi said. He gave examples of how certain mechanisms could be deployed to force China to “siphon data,” degrade the performance of its systems, and interfere with its weapons.
“When a certain code becomes active, all of a sudden the PCB makes a decision to work with the chip and actually disrupt the guidance of the munition, causing it to land in the wrong place,” he said.
Locks described the possibility as “very frightening,” which is why “we have to roll it out in the United States and we have to roll it out in Europe soon.”
Nvidia and its assembly partners use X-ray and AI-enabled image detection tools to detect anomalies and reduce risk by physically inspecting every PCB. Nvidia declined to comment for this story.
TTM Aerospace and Defense Director Kathy Gridley shows off an automated circuit board drilling machine to CNBC’s Katie Tarasoff on May 7, 2026 in Santa Ana, California.
Andrew EversCNBC
“You need to write the numbers in pencil.”
Moving production to the United States will require investment, and the tech giants will need to prove to Wall Street that it’s a profitable move in the long run.
PCBAA’s Schild said many executives are “stating that risk is part of their cost analysis” and recognize the need for diversification.
“But of course the numbers need to be revealed in pencil,” he said. According to PCBAA, building a circuit board factory will cost between $250 million and $400 million.
In addition to TTM’s domestic development, Sanmina also has expanded operations in two manufacturing locations in California, China, and Singapore.
There is also a growing list of startups experimenting with potentially useful innovations. Founded by former SpaceX employees, Quilter uses AI to design increasingly complex circuit boards. And Itera makes “fluid” circuit boards that can be quickly rewired to reduce the need for so many new boards.
“The best thing we can do is foster a robust domestic PCB industry that begins to be competitive against subsidized prices from competitors and provides options for these companies to buy domestically from trusted partners in a more resilient manner,” Cadenazzi said.
WATCH: As AI boom progresses, US faces dangerous dependence on Chinese circuit boards
