Ultrasonic Additive Manufacturing (UAM) is a hybrid manufacturing process that involves the layer-by-layer ultrasonic welding of metal foils in the solid state with periodic CNC machining to achieve the desired 3D shape. UAM enables the fabrication of metal smart structures, because it allows the embedding of various components into the metal matrix, due to the high degree of plastic metal flow and the relatively low temperatures encountered during the layer bonding process. To further the embedding capabilities of UAM, in this paper we examine the ultrasonic welding of aluminium foils with features machined prior to bonding. These pre-machined features can be stacked layer-by-layer to create pockets for the accommodation of fragile components, such as electronic circuitry, prior to encapsulation. This manufacturing approach transforms UAM into a “form-then-bond” process. By studying the deformation of aluminium foils during UAM, a statistical model was developed that allowed the prediction of the final location, dimensions and tolerances of pre-machined features for a set of UAM process parameters. The predictive power of the model was demonstrated by designing a cavity to accommodate an electronic component (i.e. a surface mount resistor) prior to its encapsulation within the metal matrix. We also further emphasised the importance of the tensioning force in the UAM process. The current work paves the way for the creation of a novel system for the fabrication of three-dimensional electronic circuits embedded into an additively manufactured complex metal composite. © 2018 The Society of Manufacturing Engineers