A logical correction: Understanding Europe’s EMS decline
At Evertiq Expo Berlin 2025, industry analyst Dieter Weiss from in4ma took the stage to dissect what many have labelled a “crisis” in Europe’s EMS industry. He argued that the 14% market decline in 2024 was not an unexpected collapse, but the inevitable result of years of artificial growth.
“We don’t assume, we don’t make variety analysis — we have actual data,” Weiss stressed. In4ma’s annual survey, covering 42% of companies just a month after year-end, showed that from 2021 to 2023 all European countries posted double-digit growth in EMS revenues. Roughly one-third came from price increases, the rest from volume. But those volumes, Weiss explained, were inflated by stockpiling.
“It was an artificial build-up of articles in the warehouses of the OEMs. At a certain stage, when the warehouses were full, people pulled the brakes and said no more orders. So it was a logical consequence that 2024 was a bad year.”
The largest German EMS firms — those with more than EUR 100 million in revenues — saw business fall 21.6% in 2024, but only after enjoying a combined 44% surge in the three years prior. Smaller companies fared better, with declines of around 10–12%, simply because they hadn’t experienced the same boom.
So maybe we shouldn't view it as a decline but a correction of the market?
“Yes, it is definitely a correction.”
The vulnerable small players
The downturn also pushed companies out of the market. 28 EMS companies in Europe exited in 2024, 10 of them in Germany alone. Nearly all had revenues under EUR 5 million. Many folded due to insolvency; others sold themselves to their main customers, often becoming part of the OEM.
Small EMS firms, Weiss noted, typically depend on just a few customers. “If one customer fails, you can easily have 25 to 35% lower revenues. Only if you have a very strong financial background can you survive that.”
Aerospace & defence stand apart
Almost all market segments declined in 2024, except aerospace and defence. In Germany, the sector grew 29%, although it represents just 3.7% of the national EMS market. Countries such as the UK, France, Italy, Norway, and Sweden have higher shares in this segment and are reaping the benefits.
The EU’s plan to invest EUR 800 billion in defence systems over the next decade could drive further growth, but Weiss cautioned that breaking into this space requires more than adding sales staff. “If you want to get into a new business, it normally takes you one and a half, two and a half years… acquisitions are often the way.”
Avoiding a repeat of 2021–2022
Looking ahead, Weiss warned that new US tariffs on electronics could set off another inventory cycle. American companies are already stockpiling when tariffs are low, which could lengthen global lead times.
The real risk, he said, is that European firms panic and start building up inventories again. “Don’t just immediately start buying the full BOM. That would be the wrong way… If we do that, it's going to be a second bullwhip effect. And we all know the bullwhip at the end has a negative part. And then we would end up having another 2024.”
Mareike Haass (in4ma) and Christoph Solka will share their insights from the stage during Evertiq Expo Gothenburg on 4 September 2025, offering attendees the latest updates on the current market landscape and what lies ahead.