A homemade crisis: Europe's EMS market shrank 14% in 2024
At Evertiq Expo Berlin, market analyst Dieter Weiss (in4ma) and Christoph Solka (IPC, today Global Electronics Association) took the stage once more — not to speak of promise and growth, but of collapse. With data from over 400 companies and biting commentary, the duo unpacked what they claim to be the worst year for Europe’s EMS industry in two decades — and a crisis entirely of the industry’s own making.
“Don’t call it a general global economic slowdown,” Weiss warned the audience. “That’s bullshit.”
The room fell silent.
The European EMS industry contracted by 14% in 2024. Germany saw an even steeper fall of 17.8%, while 28 EMS companies closed their doors entirely. And yet, despite this decline, employment across the sector dropped by only 2%. The result? A dramatic drop in productivity — minus 12.2% across Europe, and minus 16.8% in Germany.
The core explanation? Panic orders, driven by misinformation during the “chip crisis”, Weiss explains — a phenomenon he compared to the toilet paper panic of 2020 during his keynote in Gothenburg last year.
“Don't talk about a global slowdown of the industry. There was no global slowdown of the industry. Our problems in the electronics industry were homemade,” Weiss said.
Inventory levels, which historically stood at around 15% of annual revenue, shot up to 30% or more. The industry had been building products for demand that never existed — and OEM shelves are still full, Christoph Solka adds.
A shrinking pie, and who’s eating it
in4ma estimates Europe is home to 2,400 EMS companies. But just 136 of them — those with annual revenues above EUR 50 million — now account for 81% of the total market. The other ~1,800 firms share the remaining 19%.
At the same time, Eastern Europe — with fewer companies — nearly matches Western Europe in revenues, thanks to the presence of giants like Flex, Jabil, Plexus, and Foxconn. Labour cost disparities continue to define where large EMS investments land.
Sector breakdown and outlook
The automotive and industrial sectors were hit hardest, with declining orders and severe pricing pressure. Aerospace and defense electronics stood out with 29% growth — though the segment still only accounts for 3.7% of Germany’s EMS output. In other countries, such as France, Italy, the UK, and parts of Scandinavia, the defense share is significantly higher. Consumer electronics and agriculture saw marginal gains.
Looking ahead, Christoph Solka pointed to new data from the Component Distributors Association. After several quarters of falling billings and bookings, the book-to-bill ratio began to climb again in early 2025. By Q1, bookings and billings had finally started to even out — a potential signal of recovery.
The forecast? A 3.1% increase in EMS revenues across Europe this year, with Eastern Europe expected to grow 3.6% and Western Europe 2.7%. Germany, however, is projected to be the laggard, with just 1.6% growth.
But even with cautious optimism, old fears are creeping back.
“What happens at the moment,” Weiss said, “is that there is this guy called Donald Trump who is installing tariffs all the time... Monday, tariffs are high. Tuesday, they are low. Wednesday, they are high again.”
The result: US companies are stockpiling components, hoping to beat the tariffs. Delivery times in Europe have begun to stretch — not dramatically, but enough to raise concern. And Weiss is already seeing the early signs of panic.
“I have to warn you: don’t assume this is the next chip crisis and start hoarding again,” he said. “If we all act reasonably, this will not become a problem.”
But if we let fear take over — again — we’ll repeat the same mistake.
A call for sovereignty — and for urgency
Towards the end, the tone sharpened even further. Weiss argued that Europe must legislate for the domestic production of system-critical electronics — especially PCBs for defence and aerospace. He warned of the national security risks tied to dependence on Chinese production.
He described scenarios where multilayer circuits could be manipulated to fail under specific radio signals — for example, by heating a trace embedded in the inner layers until it breaks like a fuse.
Despite repeated warnings to Brussels, little has changed, he noted.
“We’re so stupid, we think the global economy means buying where it’s cheapest. China doesn’t do that. The US doesn’t. Russia certainly doesn’t.”
Mareike Haass (in4ma) and Christoph Solka will return to share their insights at Evertiq Expo Gothenburg on 4 September 2025, offering attendees the latest updates on the current market landscape and what lies ahead.
