Europe is falling behind – and there is no plan
During Evertiq Expo Berlin, in4ma's Dieter Weiss and Maraike Haas, alongside EMSNOW's Eric Miscoll, had just presented five years of data showing Asia lapping Europe in EMS growth. Off stage, they went further.
The numbers had already made the case. All major regions, five years of data, and a gap that kept widening. Asia was pulling away from both Europe and the Americas in EMS growth – not because of a single event, but because of a structural shift that had been building for years. After their presentation, Evertiq took the opportunity to dissect what the data actually meant, together with Dieter Weiss and Eric Miscoll.
The question was direct: why is Europe lagging so far behind?
The AI build-out is passing Europe by
Weiss went straight to the root. The companies driving the current growth cycle are large international OEMs building data centre infrastructure – and they have two requirements: cost-competitive solutions and manufacturers large enough and technically capable enough to handle the work. European EMS companies are struggling to meet either condition.
The electronics architecture for data centre hardware is simply beyond the capability of most Western manufacturers, which means the PCB is already being sourced in Taiwan, Korea, or China, and the assembly order follows the board.
The revenue figures bear this out. Taiwan and China together control 82.7% of global EMS and ODM production value. Western companies – despite accounting for 50 of the 100 companies on the list – represent just 13.9% of revenues. Europe's share alone stands at 2.5%.
The 2024 vs.2025 growth figures show the gap widening in real time. Taiwan (excluding Foxconn) added USD 85.5 billion in a single year – growing 42.3% to reach USD 287.5 billion. Foxconn itself grew 20.3%, adding USD 43.4 billion. China/HK grew 12.3%, adding USD 14.8 billion. The Americas grew 11.2%, adding USD 9.4 billion to reach USD 93.6 billion. Europe grew 5.8%, adding USD 1.1 billion, reaching USD 20.12 billion – last among all major regions.
Miscoll added a dimension that the headline figures don't fully capture. The rankings shown on stage tracked where companies were headquartered, not where they manufactured. Some of the US-based companies counted in the Americas column have large factories in Asia and increasingly in India. "The picture is probably a little more severe if you look at it from that perspective," he said.
His broader assessment was blunt. "Europe suffers because they're not going to be participating as much in the AI ramp-up that's going to happen over the next three to four years. The United States will, to an extent, but Asia, I think, will be the dominant location for manufacturing."
Plans and the absence of plans
Weiss pointed to the behaviour of the largest contract manufacturers as an illustration of the gap. Flex has announced it is separating its AI business into a standalone entity. Foxconn has a strategy. These are companies making explicit choices about where they want to position themselves in the AI supply chain.
"They have a plan, and they want to be in there. I don't see a plan in Europe," Weiss said. "That is my biggest concern."
Miscoll identified a structural reason why plans are harder to form in Europe than elsewhere. "One of the big differences with the US and the EU, of course, is we're one government. The EU – getting 27 countries who have some history with each other to agree isn't always an easy thing to do."
Regional supply chains, but the materials still come from Asia
On the question of reshoring and supply chain shortening, Miscoll's view was measured. Full reshoring is not the trajectory – what is emerging is regionalisation. The Americas will increasingly supply the Americas, with Mexico playing a central role. Europe will supply Europe. But the underlying materials and components feeding those regional supply chains still predominantly originate in Asia, and that dependency is not shifting quickly.
"All the materials are still coming from Asia ultimately," Miscoll said, "and people are starting to work towards that."
Defence is not enough
Looking at the rest of 2026 and into 2027, both were cautious. The data centre investment cycle – which both agreed has roughly five years left to run – will continue to benefit Asia disproportionately. Europe's defence boom is real, but Weiss put it in proportion.
Historically, defence has represented around 5% of the European EMS market. Even a meaningful increase – to 7% – does not offset the drag from automotive, which is showing negative growth. Chinese companies supplying European automotive manufacturers are down 16.7%.
"Yes, it's good if that jumps to 7%, but still, it's not the biggest thing," Weiss said.
Miscoll pointed to a specific risk for the second half of 2026. PCBs are increasingly being directed toward data centre applications, which means other sectors may find themselves unable to source what they need. "There's a real risk of that," he said.
The more optimistic conversation, both noted, is happening around 2027. EMS companies they speak to are already projecting more confidence there than in the remainder of this year.
