Europe’s Electronics Dilemma: A Will Without a Way
The EIPC Winter Conference in February was revealing for several reasons, not the least of which was that the view among the 125 primarily European electronics engineers and executives in attendance was their industry and governments had failed them by not acting more swiftly and vigorously to staunch the offshoring tide.
Europe, in some ways, came out of the dot-com mess in better shape than North America. The number of PCB factories still standing on the continent is estimated at 186, with an aggregate revenue of approximately $1.89 billion last year, according to Data4PCB. That was good for a 2.2% share of the world market. (Data4PCB used data from TPCA and CPCA in its estimates; we will wait for Dr. Hayao Nakahara of N.T. Information for the definitive report later this year.)
That’s not great: In 2000, when most Western markets were peaking, it was $5.4 billion and about a 16% share split among more than 550 fabricators. 2020 excepted, it’s been operating in a fairly stable band of $1.7 billion to $1.9 billion for more than a decade.
Sound familiar?
In comparison, North America’s fall was more precipitous, even if the landing was higher than that of Europe’s. Revenues peaked at above $10 billion in 2000, when its share of the world market was neck-and-neck with Japan’s at about 30%. The number of shops (meaning individual facilities) – merchant and captive – has plunged to about 230 from well over 1,000 25 years ago. Revenues are now in the $3.75 billion range, and overall share hovers around 4%.
Flummoxed, the US spent the better part of two decades in the wilderness, with no real focused effort to counter the drain of demand and technology. The coordination of the Printed Circuit Board Association of America, coupled with the recognition by a small handful of legislators, has helped bring attention to those who can start the process of revitalizing the domestic industrial base. The heaviest lift, of course, was made by the Semiconductor Industry Association, whose determined lobbying boosted the semiconductor industry’s profile in the corridors of Washington. The passage of the Chips Act created an updraft that PCBs are trying to capitalize on.
But Europe remains a mystery. It’s central government in Brussels has certainly shown itself capable of drafting and instituting industrywide mandates when it suits them; to wit, the Vienna Convention, which established a framework for negotiating international regulations on ozone-depleting substances and led to the subsequent Montreal Protocol; REACH, which controlled chemical use; WEEE, the overarching recycling and reuse legislation; and of course, RoHS, which forever changed the face of soldering.
The efforts in the US have yet to reap tangible benefits, but attention is rising, and even if dedicated legislation doesn’t come about, electronics as an industry is now recognized as vital at the highest levels of government. Absent a similar industry push, it does not appear the European Commission will find on its own the spark that drives a legislative mandate to boost the Continent.
That’s why I wholeheartedly agree with the entirety of this letter from the EIPC to the European Commission in support of the printed circuit board industry.
I especially like this statement: “Electronics underpin Europe’s economic resilience and strategic autonomy.”
The electronics industry has for decades shown spectacular tactical prowess while lacking the strategic plan necessary to fulfill its aims. But the goals must align with the objectives. If national or regional self-sufficiency is the goal, then objectives must be put in place to achieve it. And while we in the trenches understand that, we cannot assume those charged with writing legislation do.
P.S. If you believe manufacturing is returning to domestic shores and want guidance on how to outfit the factory, judiciously implement AI, develop workforce training programs and a host of other business issues, check out the management sessions at PCB East. Network with peers while getting clear-eyed wisdom from those who have gone before you.
Mike Buetow is president of PCEA (pcea.net); mike@pcea.net.