The European electronics industry is facing mounting geopolitical pressures that threaten the continent’s technological and industrial sovereignty. Europe’s reliance on external sources for critical electronic components, especially in defense and advanced technologies, has created significant vulnerabilities in supply chains. Industrial sovereignty, the ability to produce essential technologies domestically, has become a vital strategic priority to safeguard European security, economic resilience, and technological leadership.
Europe’s Declining Electronics Manufacturing Base
Europe’s share of global electronics manufacturing has plummeted over recent decades. According to a 2025 IPC report, Europe’s share of global electronics production fell by over 35%, now constituting only 11.6% globally. This decline is particularly alarming in sectors linked to defense, where the electronic content of military equipment has risen from 10% in 2000 to 17% in 2023, expected to reach 25% by 2035-2040. Despite electronics becoming more critical to defense capabilities, Europe produces only a fraction of the advanced components it needs domestically. For example, Europe accounts for just 8% of global defense-related advanced packaging, 6% of printed circuit boards (PCBs), and 4% of integrated circuit (IC) substrates manufacturing.
Strategic Vulnerabilities in Defense Readiness
The erosion of Europe’s electronics industrial base exposes it to supply chain disruptions, particularly for essential defense technologies like drones, radar systems, and secure communications. Without a resilient European electronics ecosystem, the continent’s defense readiness could be critically compromised amid geopolitical shifts.
Europe’s defense sector urgently needs policies focused on strengthening domestic electronics production to minimize dependency on foreign suppliers and improve industrial resilience. Events like the Evertiq Expo 2025 emphasize the growing recognition that Europe’s security is increasingly tethered to its ability to produce strategic electronics internally. Ecrin Systems, a key European player in embedded electronics and rugged industrial computers, exemplifies the importance of sustaining domestic manufacturing capacity to meet the most demanding industry and defense requirements.
Broader Geopolitical and Economic Pressures
Beyond defense, Europe’s entire electronics supply chain faces geopolitical risks heightened by U.S.-China tensions, trade disputes, and fractured global alliances. The semiconductor industry, a cornerstone of modern electronics, is globally concentrated, with around 80% of production located in Taiwan. Europe and the U.S. each hold about 10%, prompting the EU to launch initiatives like the Chips Act, aiming to quadruple domestic production of advanced chips by 2030 to reduce strategic dependencies and boost competitiveness.
European components distribution data from 2025 reveal fragile recovery signs but also lingering vulnerabilities. The market showed modest growth (+4.09%) yet remained exposed to geopolitical tensions. Some regions such as Turkey and Benelux experienced growth while others, including Eastern Europe and the UK, saw declines. Semiconductor distribution increased by only 0.77%, highlighting ongoing challenges in supply stability and growth. Energy costs, fragmented markets, and industrial restructuring further complicate Europe’s electronics manufacturing landscape.
Why Industrial Sovereignty Matters
Industrial sovereignty is more than an economic ambition, it is a strategic imperative. Europe’s ability to develop, manufacture, and control key electronic components directly impacts its technological sovereignty, defense capabilities, and economic stability. Dependence on external suppliers risks supply chain disruptions during geopolitical crises, undermining national security and critical infrastructure.
Achieving industrial sovereignty requires coordinated European policies, investment in innovation and manufacturing capacity, and support for small and medium enterprises (SMEs) across the electronics value chain. The European Union’s strategic frameworks seek to enhance resilience by financing new production facilities, improving scaling opportunities, and aligning defense and industrial policies.
In a world where technology is a core geopolitical battleground, Europe’s path to industrial sovereignty is challenging but vital. Strengthening domestic electronics manufacturing capacity protects against external disruptions, underpins defense readiness, and ensures Europe retains leadership in the digital and green transitions vital to its future prosperity.
