Europe’s electronics industry has forgotten how to win

By Stéphane Klajzyngier, Deputy CEO, ALL Circuits

Ask almost anyone in European electronics what we need, and you will hear a version of the same word: protection. Protect the supply chain. Protect our capacity. Protect what is left. It has become the reflex, the safe answer, the thing everyone can agree on. And I understand the instinct completely, we have lost so much over the past two decades that the urge to defend what remains is entirely human. But I have come to believe that this instinct, more than our small size or our high costs or any of the usual culprits, is the thing most likely to finish us off. An industry that only knows how to defend has already half decided to lose.

I want to be careful here, because I am not against protection. The policy momentum of the past couple of years is real and hard-won: the broadening of the Chips Act, the focus on defence electronics, the first signs of a “made in Europe” content rule in the Industrial Accelerator Act. I support all of it. I have argued, and will go on arguing, that European assembly should count as European content even when the components come from Asia, because if we do not protect the middle of the value chain, the assembly, the design, the integration, we will lose it, and everything built around it goes too. Defence is necessary. My argument is simply that it is not enough, and that we have mistaken the first move for the whole game.

Think of it as a match rather than a fortress. Defending keeps you in the point. It does not win it. You cannot win a single point, let alone a match, without at some stage deciding to attack, to take a risk, to go for the shot you might miss. European electronics has spent twenty years perfecting its defence and has largely forgotten it is allowed to attack. And while we have been shoring up our baseline, the players who intend to win have been doing something entirely different.

Look at who actually dominates this industry and the lesson is impossible to miss. Taiwan is smaller than many European countries, barely the size of a large city by population, and yet it sits at the centre of the electronics world, from TSMC in semiconductors to the giants of contract manufacturing. That did not happen because Taiwan was large or cheap or lucky. It happened because, decades ago, it decided it wanted to win, and then organised itself, patiently and deliberately, around that ambition. Size was never the variable. Will was. And will is the one input we cannot seem to find.

The deepest misunderstanding in Europe is that protecting and competing are opposing choices, that we must shelter the industry because it is too weak to fight. It is exactly backwards. The two reinforce each other. Shelter alone keeps us small, and small keeps us weak: without volume there is no purchasing power, no economy of scale, no cost position, and therefore no genuine security. Go out and win business, by contrast, and the volume you capture becomes the very strength that makes you resilient, the buying power, the technical depth, the ability to absorb the shocks that currently terrify us. Competitiveness is not the enemy of sovereignty. It is the only durable foundation for it. We have been trying to build the roof without the walls.

If we are serious, two things have to change. The first is policy, and here I think we are only doing half the job. We know how to write protective measures, thresholds, preferences, support for keeping the lights on. We have barely begun to ask the harder question: how do we build champions? How do we back the European companies with the appetite and the capability to go and compete globally, rather than spreading thin support evenly across everyone in the name of fairness? I do not have the finished answer. But I am certain we are not even asking the question with enough urgency, and that troubles me more than any individual policy detail.

The second change is one no regulation can deliver, because it is in us. It is a question of appetite for risk. Winning means investing before you are certain, chasing contracts you might not land, accepting that you will lose some points along the way. The European habit, and I say this with affection for an industry I have given my career to, is to minimise the downside and wait for conditions to be perfect. They never are. Our competitors are not waiting. They are already here, on our ground, going for their shots, unbothered that they are playing away from home. The least we can do is decide to play back.

So I am optimistic, but it is a conditional optimism. The policy winds are finally behind us, and there is a welcome new honesty in the industry about our weaknesses, our 2% of global PCB output, our dependencies, the smallness of our individual voices. That honesty is healthy. But it only matters if we pair it with ambition. We have outstanding engineers, real industrial champions and genuine design expertise. The raw materials of a winning industry are all here. What has been missing is the collective decision to use them to win rather than merely to survive.

Protect the chain, yes. Stop the bleeding, of course. But protection is the start of the strategy, not the strategy itself. At some point we have to stop defending our end of the court and start attacking theirs. Because the opponent made that decision a long time ago, and they are not planning to lose.