Why More Companies Are Moving Electronics Manufacturing Back To The U.S.

By: estadmin

Feb 20, 2025

For decades, companies have relied on offshore manufacturing for lower labor costs and high-volume production. But recent global supply chain disruptions, rising tariffs, and geopolitical risks have forced manufacturers to rethink this strategy.

Now, with the CHIPS Act injecting $52 billion into the U.S. semiconductor industry, reshoring electronics manufacturing isn’t just an option—it’s a strategic necessity.

At EST, we help companies transition from offshore production to U.S.-based manufacturing, ensuring better supply chain stability, compliance, and faster time-to-market. Here’s how the CHIPS Act is reshaping electronics manufacturing—and why reshoring might be your best move.

1. What is the CHIPS Act & Why Does It Matter?

🔹 The CHIPS Act at a Glance The CHIPS and Science Act of 2022 is a federal initiative to bring semiconductor manufacturing back to the U.S. The Act:

✅ Provides $52 billion in funding for semiconductor R&D and production

✅ Incentivizes U.S.-based electronics and PCB manufacturing

✅ Reduces reliance on China and other offshore suppliers

📌 Why it matters: The CHIPS Act isn’t just about semiconductors—it’s about strengthening the entire U.S. electronics supply chain.

🔹 The CHIPS Act’s Impact on Electronics Manufacturing

✅ More domestic supply of critical components (less reliance on overseas fabs)
✅ Lower risk of semiconductor shortages (reducing lead times for U.S. companies)
✅ More funding for U.S. PCB manufacturing (helping companies like EST scale production)

📌 Example: Before the CHIPS Act, 90% of the world’s advanced semiconductors were made in Taiwan—putting U.S. manufacturers at high risk during global supply chain disruptions. Now, with Intel, TSMC, and Samsung investing in U.S. fabs, supply chain security is improving.

✅ What this means for OEMs: Companies that partner with U.S.-based contract manufacturers will have faster access to semiconductors and critical components—giving them a major competitive advantage.

2. Why Companies Are Reshoring Electronics Manufacturing

✔ Supply Chain Resilience & Shorter Lead Times Offshore manufacturing exposes companies to unpredictable shipping delays, tariffs, and trade restrictions. The pandemic showed the vulnerabilities of global supply chains—many companies couldn’t get components for months.

✅ U.S. Manufacturing Advantage: EST offers shorter lead times and on-demand production, eliminating the risks of international freight delays.

📌 Example: A defense contractor sourcing PCBs from China experienced a 16-week delay due to trade restrictions—switching to EST cut lead times by 60%.

✔ Tariffs, Trade Wars & Rising Offshore Costs U.S. tariffs on Chinese electronics have increased by up to 25% since 2018. Freight costs for container shipping have tripled in the last few years. Wages in China & Southeast Asia are rising, closing the labor cost gap.

✅ U.S. Manufacturing Advantage: Producing domestically eliminates tariffs, shipping fees, and regulatory uncertainty.

📌 Example: A U.S. medical device manufacturer saved $1.2 million in tariffs & shipping costs by moving production from China to a U.S.-based facility.

✔ Regulatory & Compliance Benefits (ITAR, ISO, FDA, etc.) For industries like defense, aerospace, and medical devices, offshore manufacturing creates compliance challenges:

ITAR-restricted components can’t legally be produced offshore.
ISO 13485 & FDA regulations require full traceability, which many offshore manufacturers lack.
Quality issues in offshore production increase the risk of failed compliance audits.

✅ U.S. Manufacturing Advantage: EST is ITAR-registered, ISO 9001 & ISO 13485-certified, and FDA-compliant—ensuring your product meets U.S. regulatory standards.

📌 Example: A company producing avionics had to rework an entire batch of offshore-produced PCBs after failing ITAR compliance—leading to $500,000 in losses.

3. The Future of Reshoring: What’s Next for U.S. Manufacturing?

The CHIPS Act is just the beginning. More government incentives for U.S. electronics manufacturing are expected. Companies that shift production now will be ahead of their competitors. New U.S.-based semiconductor fabs will create better supply chain security.

📌 What this means for you: Companies that partner with a U.S. contract manufacturer like EST will be better positioned for supply chain resilience, compliance, and long-term stability.