INDUSTRY CONCERNS European electronics decline threatens security and sovereignty

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Rogers Corporation

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The decline of printed circuit board and electronic manufacturing services in Europe is posing significant risks to the continent's security and sovereignty. With only a small fraction of the global production taking place locally, Europe's dependence on foreign suppliers threatens the integrity of its critical infrastructures and defense capabilities. ZVEI is calling for a robust de-risking strategy to bolster domestic manufacturing and protect against potential manipulation and competitive disadvantages.

Germany and Europe cannot continue to passively watch the decline of their printed circuit board (PCB) industry and electronic manufacturing service providers (EMS). Currently, only two percent of globally produced PCBs are manufactured in Europe, and the continent's electronics manufacturing accounts for only ten percent of the global market volume. Both PCB and EMS manufacturing are vital for the secure operation of critical infrastructures and the defense industry. The inability of Germany and Europe to rely on their own capacities and expertise poses significant risks: deliveries could be withheld or even manipulated. "We need a reliable de-risking strategy to secure our European interests through targeted measures," demands Wolfgang Weber, Chairman of the ZVEI Management Board.

Given the crucial role of PCB and EMS manufacturing in the microelectronics ecosystem, the new federal government must also address this issue. Increasing dependence on a few suppliers from the Far East, in the current geopolitical context, carries high risks that threaten European security. In the worst-case scenario, manipulation of technical infrastructures and defense technology could occur. These could be achieved, for instance, through "hardware trojans" or hidden backdoors in electronic systems with minimal effort at any stage of manufacturing. Discovering them, however, would be extremely challenging.

Furthermore, the situation could worsen due to tariffs imposed by President Trump on Chinese products. There is a risk that PCBs from low-cost Chinese production could flood the European market, with severe consequences for the competitiveness of local suppliers. Europe must therefore vigorously defend its independence and resilience. This includes particularly strengthening the PCB and EMS manufacturing industry through a combination of trade and industrial policy. "We must examine protective trade instruments — such as anti-subsidy or anti-dumping measures — and impose them where justified," Weber further explains.

PRINTED CIRCUIT BOARD MARKET

What's driving the European PCB industry crisis?

Additionally, it is crucial to establish trustworthy sources: to protect critical infrastructures and defense, PCBs and electronics manufacturing should only be sourced from reliable and trustworthy providers. Weber states, "We must also consider reducing tariffs on base materials: European PCB manufacturers need to import base materials, which are subject to tariffs, whereas PCBs from China are tariff-free. This is absurd and cannot continue, as it creates a nonsensical competitive disadvantage for European production."

Industrial policy must strategically enhance the competitiveness of PCB manufacturers and electronics manufacturing in the international market. Continuing efforts under the European Chips Act should focus on downstream manufacturing steps (PCB, packaging, advanced packaging, EMS) and consider process know-how in the value chain.

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