The Electronics Manufacturing Industry: A Strategic Opportunity for Europe
Electronics manufacturers are at the heart of Europe’s industrial engine. The electronics ecosystem is not only a vertical integrated industry with many segments comprising thousands of companies; it is also a horizontal industry enabling innovation and manufacturing across every sector of Europe’s economy. Electronics, in particular, power Europe’s global leadership in industrial electronics, and they are essential to secure and reliable defence and aerospace systems, medical technologies, and communications infrastructure. Moreover, electronics are crucial for the digital and green transitions and a necessity for a great majority of products to sustain modern daily life.
Europe has an important electronics manufacturing sector reinforced in the semiconductor industry through the European Chips Act. In order to make final products however it is essential to ensure a resilient ecosystem from silicon to system, reinforcing segments of Europe’s electronics industrial base where dependencies exist.
Our report highlights capacity and capability gaps in printed circuit boards and electronics assembly.
The European Electronics Manufacturing Industry Calls for an Electronics Manufacturing Strategy
The EU has an historic opportunity to make the region a hub for innovation and manufacturing with a thriving electronics sector capable of meeting Europe’s industrial and regional security needs during a period of increasing geopolitical tensions. However, the creation of a vibrant, cross sectoral industrial base does not happen overnight. It requires diligent planning, decisive action, and intense cooperation between the private and public sectors.
A robust industrial policy is a prerequisite to addressing strategic dependencies and building capacities and capabilities needed for our future prosperity and well-being. It is key to put electronics manufacturing at the centre of that effort to strengthen a resilient microelectronics ecosystem.
In order to address challenges, the European electronics manufacturing industry is calling on the in-coming European Commission, the European Parliament and Member State Governments to:
- Establish an Electronics Manufacturing Strategy as part of a New Competitiveness Deal
- Introduce a Strategic Electronics Manufacturing Act (SEMA)
- Levelling the playing field through the regulatory and tax environment
- Collaborate for a future-proof skilled workforce
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Policy Priorities:
ECONOMIC COMPETITIVENESS
A robust and innovative industrial base is vital to long-term economic growth; Electronics are uniquely and fundamentally important to how and what goods are produced. Electronics manufacturing cuts across every sector of the economy. PCB fabrication, electronic assembly, and other segments of the electronics industry, however, have been marginalized in a global race to source electronics at the lowest price. As a result, Europe is heavily reliant on offshore electronics manufacturing in key areas, making the region dangerously vulnerable to supply chain disruptions for even the most critical goods. Urgent and meaningful steps are necessary to grow regional capabilities and capacities. Learn more about IPC in Europe.
TECHNOLOGICAL INNOVATION
As the pace and complexity of innovation increases, electronics manufacturers are indispensable partners to companies across all industries to stretch the bounds of the possible. This makes the electronics industry an enabler for innovation, including in areas of EU strategic focus like the digital and green transitions. Chip technology is outpacing PCB and assembly capabilities in Europe. Increased R&D funding is therefore necessary to supply silicon to systems innovation; the time is ripe given the increased importance of electronic interconnection in driving advancements.
REGIONAL SECURITY
Europe is heavily reliant on the global marketplace for electronics to support its aerospace and defense industries. This dependency puts Europe at risk of supply chain disruptions and compromised systems. The resiliency and security of aerospace/defense electronics must be bolstered during this period of rising geopolitical tension. Security should be strengthened by establishing in conjunction with allies trusted sourcing standards for PCBs and electronics assemblies integrated into sensitive technologies. European countries should work more closely together to aggregate and direct demand to European manufacturers to build up a more robust industrial base.