Europe's electronics erosion threatens strategic autonomy
A new report from IPC warns that Europe’s continued decline in electronics manufacturing capacity — particularly in printed circuit boards (PCBs), advanced packaging, and EMS — poses a growing threat to the continent’s defence readiness, industrial resilience, and technological sovereignty.
The report, titled “Securing the Electronics Value Chain: The Blind Spot in the European Union’s Industrial Defence Strategy?”, highlights how the electronic content of defence equipment has grown from 10% in 2000 to 17% in 2023, with projections reaching 25% by 2035-2040. Despite this, Europe’s electronics manufacturing base has shrunk dramatically, with its share of global electronics production down more than 35%, to just 11.6% of global electronics production in 2023.
European defence readiness has never been a greater priority, but key links in the defence industry’s value chain might still leave it critically vulnerable. The report warns that without urgent action to strengthen the European electronics manufacturing ecosystem, the region could be critically vulnerable to supply chain disruptions for important equipment, including drones, radar systems and secure communications.
As Europe confronts mounting pressure to restore sovereignty in its electronics manufacturing base, industry events like the upcoming Evertiq Expo in Krakow on May 28, 2025, are placing a sharper focus on security and defence.
“Europe’s security and defence readiness will increasingly be determined by our ability to produce critical electronics in Europe, yet that is where we are vulnerable,” says Alison James, Senior Director, European Government Relations, IPC, in a press release. “Without a resilient electronics supply chain, there is no resilient European defence sector. The defence sector is of immediate strategic importance for Europe to face the new realities of geopolitical shifts. The report calls on the EU to embed electronics at the core of its future defence industrial policies as steps are taken to build out the region’s industrial base”.
To address these challenges, the IPC report outlines actionable policy recommendations, including an urgent review of electronics capacity, new financing allocations, increased European defence production, and improved access and scaling opportunities for SMEs.
The study highlights three high-risk layers of the electronics value chain:
- Advanced packaging: Only 8% of global defence-related production occurs in the EU.
- Printed Circuit Boards (PCBs): Just 6% of global defence-related PCBs are produced in Europe, while the PCB industry is at a critical juncture with a risk of disappearing entirely from the region.
- IC substrates: Only 4% of global defence-related production takes place in the EU.
Europe’s electronics industry is now calling for a strategy to support a sector crucial to meeting Europe’s industrial and regional security needs. Electronics are essential for defence, healthcare, communications, and the digital and green transitions.
Evertiq has previously reported that key parts of the EU’s electronics manufacturing industry are in decline, which threatens the region's security, resilience, and global competitiveness. An earlier IPC investigation found that Europe relies heavily on non-EU manufacturing in eight strategic sectors, including aerospace/defence, mobility, healthcare, and renewable energy, painting a worrying picture.
The research showed that without new policies and strategic action, Europe’s share of electronics manufacturing will continue to shrink by 2035. The EU remains heavily dependent on overseas suppliers for critical components like PCBs, advanced packaging, and IC substrates, and these dependencies are expected to worsen if nothing changes.
According to the data, the EU currently holds 2.8% of the global PCB market, which could fall to 1.7% by 2035 if current trends continue. A similar decline is expected in system manufacturing and assembly, where Europe’s share could drop from 16.6% to 15% over the same period.
Evertiq will continue to highlight the intersection of electronics and defence at its upcoming Evertiq Expo in Krakow, where this year’s programme places a dedicated focus on defence and security. The event will feature expert presentations and industry discussions underscoring the vital role electronics play in strengthening Europe’s security landscape.
