What American Dynamism means for US PCB manufacturing.

American Dynamism is Andreessen Horowitz's name for building companies that serve the national interest, a thesis a16z's Katherine Boyle introduced in January 2022. By October 2026, a16z's flagship American Dynamism list had reorganized around factories and material inputs under the banner "Production is Deterrence." For US printed circuit boards, that turn points straight at a gap: between 2000 and 2024 the country lost about 81% of its bare-board fabrication jobs while keeping most of its assembly base, and it now makes about 4% of the world's boards. Surface Art has built electronics in San Jose since 1995 and has never moved that production offshore. Here is what the movement means for defense and space hardware teams sourcing boards today.

What is American Dynamism?

American Dynamism is Andreessen Horowitz's (a16z) investment thesis for companies that serve the national interest, introduced by general partner Katherine Boyle in January 2022. Her essay "Building American Dynamism" described technologists taking on national problems that seemed unsolvable, from national security to housing, and held up companies such as Anduril, Shield AI, Skydio and SpaceX.

a16z's practice page, led by Boyle and David Ulevitch, lists the sectors it backs: aerospace, defense, public safety, education, housing, supply chain, industrials and manufacturing. The money behind it is real. a16z announced a dedicated $600 million American Dynamism fund in April 2024 and a $1.176 billion second fund in January 2026.

Surface Art is not affiliated with Andreessen Horowitz. We use the term because it describes work we have done in San Jose since 1995.

Why did American Dynamism turn to factories?

The 2022 essay never mentioned manufacturing. Four years later, a16z's October 2026 list, "The American Dynamism 50: Production is Deterrence," sorted its companies into Systems, Factories and Inputs. Its argument is that a country deters conflict by being able to keep producing under pressure.

The phrase "production is deterrence" was used first by then-Deputy Secretary of Defense Kathleen Hicks; a16z adopted it. In between, a16z extended the practice to what it calls the electro-industrial stack: batteries, motors, chemicals, materials and mining.

The shift tracks where defense technology money and attention have gone. PitchBook counted a record $49.1 billion of defense-tech venture deal value in 2025, up from $27.2 billion in 2024. The best-funded startups now build their own plants: Anduril's Arsenal-1 in Ohio covers about 5 million square feet, and Hadrian raised $1.37 billion in August 2026 to scale automated factories. None of them is building a bare-board circuit fab, which an industry group estimates at $250 million to $400 million for a new plant. Circuit boards still come from contract manufacturers and fabricators.

What do defense and space hardware startups need from a PCB supplier?

They need provable origin, ITAR handling, speed and performance they can check. Drones show why. In October 2024 China sanctioned Skydio, the largest US drone maker, and its battery supplier stopped shipping. The FY2020 National Defense Authorization Act (Section 848) bars the Pentagon from buying drones whose flight controllers, radios, data transmission devices, cameras or gimbals were made in China, and on December 22, 2025 the FCC added foreign-produced drones and critical drone components to its Covered List. Nearly every restricted item is board-level electronics.

The concern now reaches circuit boards directly. The Pentagon's industrial base chief told CNBC in June 2026 that chips, substrates and PCBs are all avenues of attack. In the same report, a large US fabricator said 71% of one California plant's output goes to aerospace and defense, and that it was raising prices 5% to 25% as AI demand competes for the same capacity.

A contract manufacturer cannot make a drone compliant on its own; that depends on the whole design. But it can answer the questions that matter. Ask any PCB partner:

Surface Art is registered with DDTC under ITAR, builds on US-fabricated bare boards for programs that require them, and publishes its delivery and return rates. Our first post covers ITAR and what it means for prototypes in more depth.

How did US circuit board manufacturing move offshore?

In two stages: an outsourcing boom in the 1990s that kept most work in US plants, then a break in 2000 to 2003 that moved volume to Asia. Bare-board fabrication collapsed; assembly largely held on.

In the 1990s, electronics companies sold their own factories to contract manufacturers. The top 20 contract manufacturers grew from $1.68 billion in revenue in 1988 to $12.45 billion in 1995, the year Surface Art opened. The break came when the dot-com bust coincided with China's entry into the World Trade Organization on December 11, 2001. Silicon Valley's largest contract manufacturer, Solectron, reported that its international share of sales rose from 33% to 51% between fiscal 1999 and 2001; it cut about 11,800 positions and moved Milpitas programs to Mexico and Penang. Sanmina bought SCI in 2001, Flextronics absorbed Solectron in 2007, and as recently as 2023 TTM closed its Santa Clara fabrication plant.

Government employment data shows what actually left. We tabulated the Bureau of Labor Statistics' records for bare circuit board fabrication and circuit board assembly:

The US did not lose its circuit board assembly base. It lost its bare-board fabrication base. Nationally, assembly employment fell 9% while the number of assembly establishments rose 40%; in Santa Clara County it ended 2024 about where it started. The gap is upstream, in the boards themselves.

What has staying in San Jose since 1995 looked like?

Surface Art opened in San Jose in 1995 and has never moved its production offshore, through the 2000 to 2003 break, the 2008 crisis and COVID.

COVID was the hardest test. The Commerce Department found that buyers' median inventory of key chips fell from about 40 days to under five; chip lead times reached about 27 weeks; and shipping a 40-foot container from China to the US West Coast went from about $1,440 in 2019 to $20,586 in September 2021. Surface Art kept running and built ventilators.

Today we build for satellite and drone programs, alongside aerospace, defense and medical work. For programs that need it, we build on bare boards fabricated by US fabs; we source boards offshore only when a customer asks. We are registered with DDTC under ITAR and certified to ISO 9001:2015 and ISO 13485.

Continuity shows up in relationships too. Some of our customers have worked with us for 15, 20 and 25 years. One electronics engineer in aerial imaging put it this way: "Over 25 years, I cannot recall a single major mistake or defect that impacted our execution."

Harvard's Gary Pisano and Willy Shih argue that once production leaves a region, the shared manufacturing know-how around it, what they call the industrial commons, erodes with it. Their own example was a Kindle controller board made in China because US firms had long since outsourced circuit board manufacturing to Asia. Staying in San Jose kept one piece of that commons working.

How big is the US PCB fabrication gap?

The US makes about 4% of the world's printed circuit boards. Taiwan's PCB association and research institute ITRI estimate US output at $4.01 billion in 2025, a 4.2% share of an $85.8 billion market; IPC put the share at 3.9% in 2017, and a 2022 Commerce and Homeland Security assessment at roughly 4%. Industry estimates put the US share at nearly 30% around 2000. By factory location, China makes more than half of the world's boards (about 59% in 2024).

The number of fabricators has shrunk by every count: the 2022 government assessment cites about 780 North American facilities in 2000 and about 230 by 2020. The same report described the US niche plainly: domestic makers "have an advantage in quality, performance, and lead time" but "struggle to compete on price." Even US fabs depend on imported materials; North America's last electrodeposited copper foil plant announced its closure in December 2024.

Washington's response has gone mainly to advanced technology at established firms. About $116 million in Defense Production Act awards went to fabricators in Michigan, New Hampshire and New York, and TTM opened a $130 million ultra-HDI plant near Syracuse in June 2026. CHIPS Act money went to advanced packaging substrates, not conventional boards. The proposed PCBS Act, which would give buyers of US-made boards a 25% tax credit, is still in committee. We have not seen comparable new investment in quick-turn fabrication on the West Coast.

What does the 2027 Pentagon circuit board rule require?

10 U.S.C. 4873 bars the Department of Defense from acquiring covered printed circuit boards, bare or assembled, from China, Russia, Iran or North Korea, with a statutory date of January 1, 2027. It applies only to contracts signed after DoD issues a final rule, and as of November 2026 DoD has published only an advance notice.

That July 2026 notice matters for anyone sourcing boards. DoD proposed applying the restriction by the geographic point of fabrication of the bare board, flowing it down to every tier, and keeping records for ten years or more. Its waiver approach leans on IPC-1782 traceability and IPC-1791 trusted-facility certification, which DoD estimates takes 8 to 16 months to earn, and it asked whether to phase the rule in over 12, 18 or 24 months.

The practical point: assembling a board in the US does not settle where it was fabricated. For programs that need it, Surface Art builds on bare boards fabricated by US fabs and assembles them in San Jose. The final rule's details, including timing, are still to come.

Why is Surface Art exploring in-house bare-board fabrication?

Because domestic fabrication capacity is scarce, and building boards next to the assembly line would add speed and control. We are exploring it; we are not announcing a timeline.

The capacity signals are hard to miss. Santa Clara County had 153 bare-board fabrication establishments in 2000 and about 40 in 2025. A US industry group reports trusted defense fabs running at record utilization, a 2025 trade column described domestic fabs declining to bid on new accounts, and AI hardware demand now competes for the same lines. Bringing fabrication in-house would shorten the loop between a board's design review, its fabrication and its assembly, and keep ITAR-sensitive fabrication data under one roof.

It is not easy, and we would rather say so. A rigid multilayer fab is a chain of imaging, wet chemistry, lamination, drilling, plating, solder mask and electrical test sitting on top of a wastewater treatment plant. San José's sewer-use rules cap nickel at about one-eighth of the federal new-source limit. Silicon Valley learned why the hard way: after the 1981 Fairchild solvent leak, Santa Clara County ended the 1980s with more Superfund sites than any other US county, one of them a Mountain View circuit board plant. Bare boards are also qualified to their own standards, IPC-6012 and IPC-A-600 (our Class 2 vs. Class 3 guide explains how they relate to assembly standards), and experienced process engineers are scarce.

For a sense of scale, TTM's new Syracuse plant cost $130 million. That is not our plan or our budget; it is a reminder of why fabrication left and why bringing it back is worth doing carefully.

Why do we publish our on-time delivery and RMA rates?

Because "99% on-time" means little without a period and a definition, and we think customers should be able to check. We publish our monthly on-time delivery and RMA rates and update them every six months.

How we measure. A unit counts as late if it misses the delivery date the customer requested and we quoted. The RMA rate counts every return, not just confirmed workmanship failures, against the month the units shipped, so the most recent months can still rise as later returns arrive. We don't publish unit counts; we do publish every month, including the imperfect ones.

We are one of very few contract manufacturers that publish actual delivery and quality data, and we haven't found another that publishes its monthly RMA rate. Most of the industry publishes nothing period-specific. A 2016 industry column called most website on-time claims meaningless without the period, the volume and the date lateness is measured against.

There is no credible free benchmark for contract manufacturers' on-time or return rates. For context, APQC's cross-industry median is 93% of orders shipped complete and on time, and one aerospace OEM's published supplier requirement is 96% on-time over a rolling three months.

Getting a defense or space build ready? Our NPI checklist covers what to send before the first board.

Frequently asked questions

Who introduced the term American Dynamism?

Katherine Boyle, a general partner at Andreessen Horowitz, introduced it as an investment thesis in her essay "Building American Dynamism" on January 14, 2022.

Is Surface Art affiliated with Andreessen Horowitz?

No. Surface Art is an independent contract manufacturer in San Jose, California. We use the term because it describes work we have done since 1995.

Where are Surface Art's boards made?

We assemble every board in San Jose. For programs that need it, we build on bare boards fabricated by US fabs; we source bare boards offshore only when a customer asks.

Does Surface Art fabricate bare circuit boards?

Not today. We are exploring bringing bare-board fabrication in-house, with no timeline announced.

Is the Pentagon's PCB ban in effect?

The statute's date is January 1, 2027, but it applies only to contracts signed after DoD issues a final rule. As of November 2026, DoD had published only an advance notice of proposed rulemaking.

How does Surface Art measure on-time delivery and RMA?

A unit is late if it misses the delivery date the customer requested and we quoted. The RMA rate counts every return against the month the units shipped. We update both every six months.

What share of the world's circuit boards does the US make?

About 4%: $4.01 billion of an $85.8 billion market in 2025, according to Taiwan's PCB association and ITRI.