The electronics market in Europe – what needs to happen?

Author: Dirk Stans – Managing Partner at Eurocircuits

To recap, the Chips Act will be supported with over EUR 43 billion in policy-driven investments until 2030, complemented by a similar amount of private long-term investments.

The Chips Act aims to:

• Invest in next-generation technologies
• Ensure access across Europe to design tools and pilot lines for the prototyping, testing, and experimentation of advanced chips
• Establish certification procedures for energy-efficient and reliable chips to guarantee quality and security for critical applications
• Create a more investment-friendly framework for setting up production facilities in Europe
• Support innovative start-ups, scale-ups, and SMEs in accessing equity financing
• Promote skills, talent, and innovation in microelectronics
• Develop mechanisms to anticipate and respond to shortages and crises in the semiconductor sector, ensuring supply security
• Establish international partnerships on semiconductors with like-minded countries

By 2030, these efforts should lead to a European market share of 20% in global chip production.
 

Key questions from the electronics sector

Following the introduction of the Act, industry players immediately raised fundamental questions:

• Which chips will we manufacture, and for what purpose?
• What happens to the entire electronics production value chain? Will we only produce chips while outsourcing the rest of the value chain?

These concerns prompted European industrial leaders to join forces, and under the initiative of IPC Europe, an initial meeting took place on 19 April 2023 to discuss the necessary actions. The market was mapped out, and projections were made up to 2030 and even 2035.

Key findings

From these discussions, the following conclusions emerged:

• The Chips Act is meaningless without considering the entire value chain since a functioning electronic application requires the full ecosystem.
• Critical parts of this value chain are missing or barely present in Europe, preventing full independence in delivering functioning applications.
• The entire political spectrum must be made aware of the precarious situation of the European electronics industry.

After two years of persistent efforts to raise awareness, we now find ourselves in a crucial period where reports by Enrico Letta and Mario Draghi emphasise the vital role of industry in Europe and outline the necessary steps for industrial progress. The time has come to move beyond raising awareness and to propose practical, actionable measures that require minimal budgetary impact yet yield significant positive outcomes.

What can governments, member states, and the EU do to improve Europe's competitiveness?

As a business leader and chairman of the FHI Federation of Technology Branches, I work closely with technology and industrial companies that play a vital role in our primary economy. These companies generate primary added value, the foundation of our prosperity. However, the technological and manufacturing industries face enormous pressure due to a wide range of challenges. So, what must be done?

At Evertiq Expo Berlin on June 5, 2025, Dirk Stans will take the stage to expand on the key themes explored in this article. Join us as he shares his expert insights on the industry’s pressing issues, potential solutions, and the steps needed to strengthen Europe’s position in the global electronics landscape.

Priorities for a stronger industry

• Enhancing the Industry’s Image: We must reposition the technology and manufacturing sectors as attractive and indispensable pillars of society.
• Investing in Talent: The industry needs a forward-looking strategy to educate and attract the workforce of tomorrow.
• Creating a Level Playing Field: Our industry must be able to compete fairly, both within and outside the EU.
• Targeted Investments: Smart and strategic investments are essential to drive innovation and growth.

The role of government: supporting entrepreneurship and reducing bureaucracy

To compete, businesses must first be able to operate efficiently. Entrepreneurship requires a supportive framework, which the government can facilitate by making regulations simpler, more effective, and less bureaucratic.

Key government actions:

Reducing bureaucracy and increasing efficiency

• Deregulation and Digitalisation: Simplify administrative processes and implement digital solutions to reduce the burden on businesses.
• Stop Complex Implementation of EU Rules: Local governments must apply EU regulations directly and without unnecessary complications.
• Affordable Energy: Ensure stable and cost-effective energy supply, which is crucial for competitive manufacturing.
• Accessible Industrial Space: Encourage affordable business premises and reasonable permitting rules that foster entrepreneurship.

Addressing competition within and outside the EU

Within the EU:

• Maintain free movement of trade and capital, avoiding internal trade barriers.
• Use influence in the European Council and Parliament to eliminate trade obstacles.

Outside the EU:

• Ensure a level playing field. Companies exporting to the EU must adhere to the same standards as European businesses.
• Strengthen the role of customs and border enforcement to ensure compliance.
• Respond swiftly and decisively to unfair competition caused by foreign state subsidies or unethical working conditions by imposing import tariffs or granting tax benefits to local businesses.

European measures for a strong future

To advance quickly, as today's world compels us to act decisively, we must start by implementing quick wins, measures that are low-cost, relatively easy to introduce, and yield maximum results. Here are three priority actions:

1. Retain Public Funds within the EU Economy: For public-funded projects, at least 60% of the added value must remain within the EU. In other words, the known principle of European Origin First.
2. Creation of an EU Electronics Raw Materials Database: Establish EU-wide digital platforms for transparency in raw materials and essential resources.
3. Standardising Standards to support EU industry competitiveness: Simplify and harmonise industrial standards and regulations to enhance competitiveness.

Each of these measures is detailed in individual reports to clarify their objectives and implementation.

By implementing these targeted actions, European authorities can not only strengthen the competitiveness of European businesses but also contribute to an innovative and sustainable industrial sector.

Take this for what it is worth, but in my view, the time for action has long since arrived. Endless discussions without decisions are no longer an option.

Dirk Stans, Managing Partner at Eurocircuits, drives the group's sales and marketing strategy. With over 20 years of active engagement in FHI, the technology federation for Dutch-speaking regions, he has served as both branch and federation chairman. Passionate about European technological manufacturing, particularly electronics production, Dirk remains committed to strengthening the industry.

At Evertiq Expo Berlin on June 5, 2025, Dirk Stans will take the stage to expand on the key themes explored in this article. Join us as he shares his expert insights on the industry’s pressing issues, potential solutions, and the steps needed to strengthen Europe’s position in the global electronics landscape.