Jabil, the largest company headquartered in St. Petersburg, is keeping a close eye on federal legislation that could have a big impact on its business operations.
The National Defense Authorization Act for fiscal year 2021 includes provisions that would phase out purchases of printed circuit boards and printed circuit board assemblies that are used in nearly all electronic products from China and other countries considered adversaries of the United States. The provision would apply to defense contractors and to acquisitions by the Department of Defense.
Proponents say the measure would improve the security of electronics, while opponents say it would disrupt supply chains and the U.S. economy.
Jabil (NYSE: JBL) was founded in the 1960s to assemble electronic circuit boards, but has diversified far beyond that initial line of business into a global manufacturing services company. Still, circuit design and assembly remain a key part of the company’s operations, and a “significant portion” of its manufacturing, design, support and storage operations is done in China, according to Jabil’s annual report.
The company hired the Squire Patton Boggs law firm earlier this month to watch the federal legislation, Politico reported. Click here to see the disclosure firm the law firm filed after it was hired. It’s the first time Jabil has hired a lobbying firm, according to Politico.
“As a global manufacturer, Jabil is focused on a wide range of issues concerning international trade, and component and materials sourcing, including printed circuit boards (PCBs) and the assembly of PCBs (PCBA). As a U.S.-based company, we are committed to helping ensure the security of our supply chain, especially as it relates to our country’s national security. We have engaged counsel based in Washington to help us monitor the FY21 National Defense Authorization Act as it relates to PCBs and PCBA,” Jabil said in a statement to the St. Pete Catalyst.
The U.S. House and U.S. Senate versions of the bill would both require defense contractors to use more printed circuit boards and assemblies from U.S. manufacturers or from those in allied countries, Nextgov.com reported. The House version of the bill would require 100 percent of the technology to come from those countries by 2033, while the Senate bill calls for full sourcing from those countries by 2032 and 25 percent of the equipment coming from trusted countries by 2023, Nextgov.com said. A conference committee is resolving differences between the bills.
The provisions would “bolster the resiliency and security of the electronics manufacturing ecosystem,” IPC, a global association of electronics manufacturers, said in a Sept. 16 statement.
The U.S. Chamber of Commerce took issue with the provisions, however, saying in a Sept. 29 letter to key House and Senate leaders that limiting the Department of Defense’s acquisition of printed circuit boards to allied countries would result in a false sense of security and would risk severe shortages of printed circuit boards.
The Chamber has proposed alternatives, including establishing a “trusted supplier” program or adopting design verification standards to ensure the integrity of printed circuit boards in the supply chain.