Europe’s ambition to secure technological sovereignty is facing a new challenge as the Global Electronics Association (GEA) urges the European Commission to rethink and expand the scope of the EU Chips Act. In a formal contribution to the Commission’s ongoing review, the Association warns that the current focus on semiconductor fabrication, while necessary, is “not sufficient” to protect Europe from supply chain risks that could cripple critical industries.
At the heart of the issue is a stark reality: Europe may soon have the world-class capability to manufacture chips but not to finish them into the systems needed for real-world technologies.
A silicon island with no bridges
The EU Chips Act, launched in 2023, aims to double Europe’s share of global semiconductor manufacturing by 2030. Billions in public and private funding have since flowed into projects to expand fabrication capacity, drawing in major players like Intel, STMicroelectronics, and TSMC. But according to the GEA, the Act fails to address the ecosystem that turns chips into market-ready products.
“Europe cannot achieve technological resilience without rebuilding the full electronics value chain,” the Association argues, pointing to areas like Printed Circuit Boards (PCBs), PCB Assemblies (PCBAs), and final system assembly and testing. These functions are essential to packaging and integrating chips into devices used in defence systems, autonomous vehicles, industrial automation, AI data centres, and other critical sectors.
In other words: Europe may be making the “brain” of modern devices, but the body is still overwhelmingly made elsewhere.
A vanished industrial base
The GEA paints a sobering picture of decline. Over the past 20 years, Europe’s capability to manufacture PCBs and related systems has eroded dramatically, pushed out by aggressive cost competition from Asia, fragmented support policies within the EU, and decades of offshoring by European manufacturers. Today, the continent relies heavily on imports from China, Taiwan, South Korea, and Southeast Asia.
Industry insiders warn that this dependency exposes Europe to the same vulnerabilities seen during the pandemic—bottlenecks, price spikes, and geopolitical risk. For sectors like defence and aerospace, there are also national security concerns: reliance on unknown or untrusted suppliers raises the risk of compromised hardware.
“The Chips Act was an essential first step, but Europe is still standing on one leg,” one GEA spokesperson said. “Without system-level manufacturing, we are building world-class chips that Europe cannot actually use.”
A call for a silicon-to-systems strategy
To avoid what the Association calls a “strategic paradox”, where cutting-edge semiconductor investments fail to deliver resilience, the GEA is calling for an expansion of the Chips Act into a silicon-to-systems strategy. The proposal includes:
Dedicated EU funding to rebuild PCB, PCBA, system packaging, and final electronics assembly capacity
Simplified financial support for small and medium-sized electronics manufacturers, who make up much of Europe’s remaining production base
A permanent industry–policy dialogue to coordinate investments, identify technology gaps, and monitor supply chain risks
A broader European Electronics Strategy, aligned with defence readiness, economic security, and autonomy objectives
Many in industry believe these changes are vital to Europe’s credibility in global tech. For example, automotive companies developing electric and autonomous vehicles need fast, reliable access to trusted suppliers to remain competitive. The same is true for manufacturers of industrial robotics and smart factory systems—two sectors where Germany, France, and Italy hope to lead.
A moment of decision
As the Commission gathers feedback, the review of the Chips Act is becoming a pivotal moment for Europe’s industrial future. If the Act remains focused on fabrication, critics fear it may deliver symbolic benefits—impressive chip yields, flagship investments—without meaningfully improving stability or competitiveness.
The GEA’s message is blunt: Europe cannot defend its digital sovereignty if the value chain ends at the chip.
For now, the ball is in Brussels’ court. The question is whether the Commission is prepared to scale its ambitions, or if Europe will continue building “smart brains” that must travel halfway around the world just to be turned into working machines.
