Inside the Fight for U.S. Advanced Packaging: Military Electronics Experts Weigh In

Estimated reading time: 11 minutes

Modern warfare—driven by rapid evolution of UAVs, autonomous systems, and high-speed sensing—has made it clear that U.S. defense electronics must move beyond legacy architectures and embrace UHDI, advanced substrates, and next-generation interconnect technologies. In this roundtable discussion, two defense electronics experts outline a central challenge: The U.S. cannot field high-performance systems or maintain technological advantage while relying on overseas PCB, substrate, and component supply chains. Advanced electronics packaging is now a strategic imperative, and rebuilding U.S. capability is essential for performance, supply chain resilience, and long-term defense readiness.

This conversation highlights several critical pain points—including the lack of a unified national electronics strategy, restrictive procurement rules, and insufficient domestic manufacturing scale—while suggesting solutions rooted in stronger industry–government partnerships, dual-use pathways, and consortium-driven investment.

Seated at the table:

• James Will, Executive Director, U.S. Partnership for Assured Electronics
• Dennis Fritz, I-Connect007 MilAero columnist, retired from Navy Crane
• Nolan Johnson, Managing Editor, SMT007 Magazine
• Marcy LaRont, Executive Director, I-Connect007, and Managing Editor, PCB007 Magazine

Nolan Johnson: Welcome, everyone. I want to start by addressing a trend in the military toward adopting more forward-looking technology in the field of electronics. As Moore's Law advances, partly through packaging improvements, printed circuit boards will need to accommodate these changes. Of course, MilAero is a key driver, encompassing a wide range of military and aerospace applications. Let’s discuss this significant shift.

Marcy LaRont: A UHDI provider told me that military and defense technology, especially when it comes to PCBs, has always been behind the curve. However, with some of the critical infrastructure, MilAero, and defense requirements now in place, the pendulum has swung. The need for high reliability is being heaped on top of these more cutting-edge solutions, which has not historically been the case.

James Will: You have to ask what will be needed in future global conflicts—Ukraine, for example—where modern warfare has centered on the development of simple UAV systems and drones, because they offer command, control, advanced sensing, and more capabilities in a compact form factor. When you pack more functionality into these spaces, you likely need substrates and UHDI printed circuit boards.

If you examine commercial drone technology today, a significant portion of it is based on UHDI capability. That's part of the driving factor for the military to use more advanced capabilities. Of course, those boards come from Asia right now. We should not forget that “we no longer own the night,” so to speak. We may not have the technological superiority we're accustomed to having. We need to be moving toward these newer technologies.

Denny Fritz: The executive agents at Navy Crane, in Huntsville for the Army, and to a degree, the Air Force at Wright Patterson, have been identifying this problem for 20 years. A 2005 National Academy study¹ stated that printed circuit boards pose a problem related to supply chain vulnerability, but the overall defense capability didn’t consider this, and just targeted Russia and, to some extent, China. Also, it only considered the very large competitors.

The Department of Defense is finally understanding that electronics technology drives weapon systems. It's not massive construction and things like that, but the weapons system’s electronics that are key in defense.

Johnson: Is it fair to say that we're watching Ukraine change how we expect warfare to look?

Will: The war in Ukraine is a “canary in a coal mine,” in a sense. It’s an opportunity to understand how a conflict would be fought with autonomous vehicles and drones. Based on some of the conferences I've attended, I can generally state that's what the Department of Defense is thinking about for the next conflict: Using UAVs to increase the amount of force they can bring to bear on something very quickly. This drives their directives on the ability to surge and scale our industrial base.

LaRont: Jim, you and I recently spoke about the critical minerals situation and its overall impact on electronics, as well as the security and reliability of the supply chain. Can you talk about that in the context of a national electronics strategy?

Will: If the U.S. had a national electronics strategy, critical minerals are clearly enablers, but the main goal of the policies and directives should be to secure the electronics supply chain that enables the system, whether that’s drones or other equipment vital for our defense that contains electronics. We do not have the ability to surge and scale. Without the printed circuit board and electronics as part of a complete system, focusing solely on critical minerals is not an adequate strategy.

Why is there this tendency to focus on one small part of a larger issue? I believe we are focused on critical minerals because Washington can see this issue, whereas it is difficult to quantify the sub-tier electronics supply chain because we don't know where all of it originates, except for the brief mentions in Forbes that indicate 6,500 components in the USS Gerald R. Ford have a Chinese origin^2,3. So, Congress is tackling critical minerals, but it is not a national strategy.

Johnson: Denny, you mentioned that even 20 years ago, the domestic manufacturing of PCBs for use in MilAero was identified as a problem. Jim, you recently claimed that we could demonstrate a significant impact on our manufacturing readiness in just 18 to 24 months. Tell me how that works.

Will: First, we need a formal and national electronics strategy that considers the points Denny makes regarding PCBs. We won't be able to fix everything in 18 to 24 months, but we can make a meaningful impact. We've yet to scale and produce UHDI circuit boards and substrates to the level we need; there's a huge learning curve there.

There are some relatively easy opportunities for which we can make an impact. We currently rely on China for most of the parts that go into the displays (LCDs) that supply aircraft like the F-35, missile defense systems, and other critical systems. We could begin by re-establishing domestic LCD and display capabilities. If 6,500 BOM line items on the newest USS Gerald Ford aircraft carrier are of Chinese origin, we can start by examining that data to understand what these parts are. Then, we could leverage U.S. and Allied-based semiconductor factories to produce those components. We can develop and design the equivalent commercial components in those factories, package and test in more assured sources, and offer them through certified distributors. Why aren't we doing that already?

LaRont: It's not so much whether we can or should, but it's all those interim steps that require money and backing to make it happen in the United States, while, of course, ensuring that the demand signal is unmistakably there.

Fritz: That is correct. Nobody in the commercial sector wants to make the medium or old technology parts. They don't make any money at it. The money's in the bleeding edge. The CHIPS Act was sold on the premise that we cannot make the most advanced semiconductors that TSMC and the Korean companies can make. We weren't short of bleeding-edge chips at that time.

Johnson: Is pushing advanced chip technology in the U.S. a key motivation for the MilAero sector to use more advanced electronics in its systems, to move away from those rugged and reliable (but legacy) parts?

Fritz: Yes, but Defense prefers to be at least one generation behind because it needs proven reliability. Traditionally, when the parts become reliable, they tend to be made overseas for lower costs.

Will: It's a double-edged sword because Defense also wants the least expensive option; that drives the buying decision.

One key point is that you won’t always need an HDI substrate; a standard PCB is still part of the system's build. If we can leverage existing infrastructure to supersede the outdated state of the practice for older components supplied by Chinese sources, that is something we need to consider.

LaRont: Jim, if we need more advanced technologies, not only to replace legacy technology and to source parts coming from Asia, but also to improve system performance and lethality, how can that be done?

Will: There are some challenges. When you want to replace a component, you have to address the “Three Fs” of form, fit, and function. The Department of Defense has restrictions that you can't change the Three Fs. There are engineering solutions to keep the Three Fs the same, but you can't, for example, add technology to expand your systems distance by another 200 miles to improve lethality and stand-off. These are the types of challenges I'm hearing about through prime contractors and other organizations.

Fritz: Defense would like to have reliable self-directed weapons: Remove the human element from the cockpit, the attributable part of the weapon system, so that a casualty doesn't come back to haunt the Defense. However, to achieve this, you need highly advanced decision-making chips. Consequently, they are now purchasing modules from NVIDIA or AMD, which require mounting on a substrate that is not readily available in the United States. That is the weak point in the semiconductor supply chain and speaks directly to our ability to provide advanced packaging solutions.

Now, the conflict in Ukraine is not restricted in that way. If the military can source a module, they'll have it in a drone on a battlefield in a month or less. U.S. Defense has noticed that quick reaction by the most innovative units in Ukraine, who take out the most Russian tanks, get extra resources based on performance. That’s a concept that Defense would never have touched two or three years ago. However, they can see how effective it is to utilize advanced electronics in creating a formidable weapons system in this war.

LaRont: The focus is always on defense primes, but when it comes to achieving faster results and maximizing the lethality of the technology you create, the role of military and defense startups becomes significantly more important.

Fritz: In my 20-plus years of experience, I’ve seen that Defense always sets aside a certain percentage of contracts for small businesses and mid-sized startups. They can deliver results more quickly than the big primes, and they do it well.

LaRont:  I'm thinking of one startup, a young guy who started a drone company. His product is fairly low-tech, but he's selling his drones to Ukraine, and his position is that the military and defense technology sector should be doing more of this. The fighters need to be able to modify the drone in the field, reuse its parts, and continue to utilize it in some capacity. They need the ability to do that, whereas before they would have been locked out.

Will: Reconfigurable systems are one of the key capabilities that advanced packaging can enable.

LaRont: Jim, you raised the point about dual-market usage for both commercial and military markets. To have just one use has been a very MilAero- and defense-oriented mindset. Is that changing?

Will: Yes, and I can give you an example. Do you know how much it costs to design, tape out, and manufacture a state-of-the-art ASIC? The defense primes certainly aren’t shouldering that kind of cost. NVIDIA, Apple, and their peers have both the funding and the business case to fund SOTA ASIC, where EDA tools alone can cost more than $30 million. It’s not feasible to justify an SOTA ASIC on a single batch of 25 wafers for purely a military-only application. We have to identify dual-use opportunities and leverage commercial economies of scale.

Fritz: It’s not too hard to figure out the average size of a shop in Taiwan, Korea, the U.S., or Europe. The U.S. average for a board shop is about $10 million of product a year, and in Taiwan and Korea, the per-shop amount is on the order of $60 to $80 million per factory.

So, if you want advanced boards, it requires either equipment suitable for a small shop, or we need greenfield. You will have to produce something on those lines besides the required defense chips. With defense electronics accounting for around 2.5% of the total world market for circuit boards, Defense consumption can't support that. That is another reason we need to consider defense circuit boards alongside critical infrastructure circuit boards in the U.S. We require a broader base than just the defense demand signal.  We need banking, power grid, communications, and health care.

Johnson: That's what's coming out of this loud and clear, isn't it? We have a strong demand driver for defense. The problem is that the quantities don't pencil out for the technology needed.

Will:. Exactly. If you read Wireless Wars, you know how Huawei equipment penetrated many of the U.S. mobile carriers’ networks because it was cheaper and heavily financed. China's national strategy has put it in a commanding position precisely because it aligned policy with scale. We, by contrast, are only beginning to respond, so even with a strong defense demand signal, the volumes are not sufficient to sustain the needed technology without a broader commercial base.

Johnson: We now have the defense sector looking at things differently. What should be the relationship between private industry and government in helping merge these needs so that we have an adequate demand signal?

Fritz: Department of Defense purchasing policies are a significant challenge, and we need a different purchasing policy. U.S. technology companies would much rather have more business in the commercial sector than deal with the paperwork and qualifications required to be a defense contractor. I participated in setting up OTAs (Other Transaction Authorities). Though OTAs are special, they can still be drug out.

Will: This administration is undoubtedly interested in forming a partnership with the electronics industry, and it goes beyond what previous administrations have done. A recent NIST (National Institute of Standards and Technology) broad area announcement (BAA)⁴ is much more broad-based compared to prior efforts, and while it addresses R&D, it’s focused on establishing U.S. leadership and emphasizes a return on taxpayer investment.

How can the industry partner with government, and how can government be a stronger partner with the industry than in the past? The government now owns a share of Intel. You may see more of that in the future, and perhaps the utilization of consortium models that distribute the cost of R&D and then scale it to meet ROI. Those are potential strategies I’m hearing these days to address those needs.

Johnson: Based on everything we've discussed so far, is this an encouraging environment for those looking to be in advanced packaging and UHDI? Is now a good time or a frustrating time to consider investing in defense?

Fritz: The frustrating part is there's been so much change at the Defense Department and the undersecretary’s critical authorization levels, as well as inaction by Congress to approve appointments to the Defense Department; but having no one in that job is perhaps the worst scenario. As far as the decision-making process at the Pentagon level, it is solving itself, but it’s not done yet.

We are seeing more attention being paid now to practical engineering and continuous development. In my opinion, the government tends to prefer hitting home runs. They don't like to play the kind of ball where everybody hits singles and scores a lot of runs, which is better for achieving some level of continuous progress. Consistency is not necessarily a word that describes defense procurement, so we need engineering badly.

Keep in mind that defense primes know how to manufacture, but they're not aggressive when it comes to manufacturing. To me, they're reactive: waiting, for example, to see how the Ukraine situation unfolds and whether policy changes at the Pentagon are merited.

Will: The defense primes would prefer to operate with less bureaucracy such as FAR and DFAR requirements and we see the DoD’s recent strategy to eliminate red tape. That said, we're not addressing the need for a long-term demand signal and pipeline. This creates uncertainty and risks for competing with subsidized components from adversaries including China. I've heard from other companies saying they've had a great year and would love to invest more in their internal capacities and domestic capabilities. Still, they can’t justify investment to their ownership without clear demand signals. This is the frustrating part.

The NIST BAA discussed the establishment of U.S. leadership, and USPAE’s coalition-based Printed Circuit Board Market Catalyst (PCBMC) concept is designed to do exactly that. It builds on a close examination of next-generation advanced interconnect and board technologies, then brings together commercial manufacturers in a consortium to translate those technologies at scale into domestic production and demonstrate clear return on investment.

If silicon foundries routinely produce back-end features in the 2–10 μm range and smaller, then we should be able to achieve similar densities in advanced interconnects. We need to focus on where the next level of integration will come from, which is certainly advanced interconnect. As Denny has noted, this is fundamentally an engineering challenge.

Johnson: That puts pressure on PCBs, on every form of interconnect, and advanced electronic packaging to keep up.

Will: That's a key point, Nolan. As advanced packages bring higher-density chips and heterogeneous integration into the system, it puts increasing pressure on PCBs, every form of interconnect, and advanced electronic packaging to keep up in terms of materials, density, and performance.

Johnson: Thank you, everyone. This has been an interesting conversation. There is some valuable insight into why this might not be progressing as quickly as one might think.

Will: I agree, Nolan, thank you.

Fritz: Good talking to you.

References

1. A 2005 National Academy study stated that PCBs pose a problem primarily related to supply chain vulnerability for military use and the environmental and health risks associated with their disposal and recycling due to the toxic materials they contain. In the study titled “Linkages: Manufacturing Trends in Electronic Interconnection Technology,” it was noted that the U.S. PCB industry was moving steadily offshore, creating a significant vulnerability for the Department of Defense (DoD) in accessing high-quality, trustworthy boards for weapons and other defense systems.

2.     This dependency was discovered through data analytics firm Govini's research, which measured the Chinese penetration of the U.S. defense supply chain and concluded that the American industrial base may not be able to deter China's military advantage.

3.     Defense Industrial Base: Actions Needed to Address Risks Posed by Dependence on Foreign Suppliers, U.S. Government Accountability Office, July 24, 2025.

4.     Advancing AI with Advanced Packaging, Lam Research.