Industry Intelligence Insights February 2026

Key Summary

• This final Industry Intelligence Insights edition transitions ongoing coverage to the Global Electronics Association Substack channel.
• AI-driven electronics and capital goods lead growth while broader goods manufacturing remains under pressure globally.
• Recent data highlight strong AI infrastructure demand across South Korea and Taiwan through exports, production, and GDP growth.
  Governments expanded upstream interventions, targeting critical minerals, strategic components, stockpiles, export controls, and industrial capacity.
• Regional manufacturing sentiment shows cautious optimism with uneven recoveries across the United States, Europe, China, and broader Asia.

This edition of Industry Intelligence Insights is our last, but don’t worry we will continue to deliver insights into the trends shaping the global electronics manufacturing ecosystem via the Global Electronics Association’s new Substack channel.  Please visit that site now and subscribe so you don’t miss anything.

In this final issue, Global Electronics Association Chief Economist Shawn DuBravac examines an increasingly uneven manufacturing landscape, where AI-driven electronics and capital goods continue to lead growth while broader goods production remains under pressure.  

You’ll also find the latest PCB and EMS Book-to-Bill results, updated global sentiment data pointing to cautious optimism, and regional insights on how manufacturers across the U.S., Europe, and Asia are navigating diverging recovery paths.

We round out the issue with new articles and resources exploring AI, skills, supply chains, and the forces shaping the electronics industry outlook for 2026.

Please follow us on Substack to stay connected as these issues continue to evolve and read on for more timely insights. 

Thiago Guimarães 
Director of Industry Intelligence, Global Electronics Association

Market Analysis from Global Electronics Chief Economist Shawn DuBravac

Over the past month, global manufacturing has settled into a familiar but uneven pattern. Electronics and AI-linked supply chains continue to accelerate, while broad-based goods manufacturing remains soft. Three themes stand out. First, electronics and capital goods tied to AI infrastructure remain the clearest sources of momentum. Second, governments are intervening further upstream, increasingly treating minerals, components, and industrial capacity as strategic assets. Third, the gap between headline production data and survey-based measures continues to widen, pointing to isolated pockets of strength rather than a broad-based recovery.

Some of the strongest recent data points are directly tied to AI infrastructure investment. For example, South Korea reported January exports up 33.9% year over year, with semiconductor exports surging 102.7%. Taiwan showed a similarly strong signal. Manufacturing production rose 22.98% year over year in December 2025, and fourth-quarter GDP grew 12.68% year over year. Across the globe, exporters appear to be benefiting disproportionately from demand linked to AI hardware and related capital investment.

Over the last month, a number of governments around the world have extended or worked to formalized policies to secure key upstream inputs, particularly critical minerals and strategically sensitive components. In the United States, a bipartisan group of lawmakers introduced legislation on January 15 to create a $2.5B critical minerals stockpile aimed at stabilizing markets and supporting domestic mining and refining. On February 2, President Donald Trump announced Project Vault, a $12B initiative designed to build roughly a 60-day emergency supply. Europe is moving along a parallel track. The European Commission said the second call for strategic projects under the Critical Raw Materials Act drew more than 160 applications, highlighting strong demand for faster permitting and funding. At the same time, the European Court of Auditors reported that the EU has yet to make measurable progress toward its CRMA targets to extract 10%, process 40%, and recycle 15% of strategic raw materials by 2030. China continues to tighten export controls as well. Its 2026 catalogue of dual-use items subject to export licensing expanded to 846 items, up from 765 in 2025.

In the United States, the Federal Reserve held rates steady at its January 28 meeting, noting that economic activity is expanding at a solid pace while inflation remains somewhat elevated. January brought a sharp rebound in the Institute for Supply Management manufacturing PMI, which rose to 52.6 from 47.9 in December, pushing the sector back into expansion territory for the first time in roughly a year. The increase was driven by stronger new orders and production. However, part of the lift could reflect post-holiday reordering and a continued pull-forward of orders ahead of tariff-related price concerns, rather than a clear inflection. Industrial production did rise 0.4% in December 2025, and manufacturing output increased 0.2%. However, manufacturing output declined at a 0.7% annual rate in the fourth quarter, underscoring the uneven nature production.

Europe continues to grow, but manufacturing remains the weak link. Euro area GDP rose 0.3% quarter over quarter in Q4 2025, a resilient result heading into 2026. Inflation has continued to ease, with euro area inflation at 1.9% in December 2025, although energy-driven input costs are beginning to reappear in factory surveys. Manufacturing indicators remain mixed. The January S&P Global HCOB eurozone manufacturing PMI rose to 49.5 from 48.8, still below the expansion threshold. The output sub-index, however, moved above 50 to 50.5, suggesting modest production growth even as new orders continue to contract. Employment remains in contraction, though at the slowest pace in several months. Performance also continues to diverge by country. France moved into expansion at 51.2, while Germany, Italy, and Spain remained in contraction.

China's economy appears to remain split between external demand and domestic weakness. Official data show 2025 GDP growth of 5%, meeting the government’s target, with policymakers signaling a 2026 focus on supporting demand and advancing manufacturing. Still, the January 2026 official manufacturing PMI slipped back into contraction at 49.3 from 50.1, with both new orders and export orders below 50. Private-sector data present a slightly more resilient picture. The China RatingDog Manufacturing PMI registered 50.3 in January, indicating mild expansion among more market-oriented manufacturers. This supports the view that smaller exporters integrated into regional supply chains can perform reasonably well even as domestic demand remains soft. Fiscal data underscore ongoing strain at home. Fiscal revenue fell 1.7% in 2025, the first decline since 2020, reflecting property sector weakness and subdued consumption.

Outside of China, much of Asia remains a manufacturing bright spot. Japan’s manufacturing PMI rose to 51.5, its first expansion since mid-2025, supported by renewed growth in new orders and foreign sales. South Korea’s PMI climbed to 51.2, the highest reading since August 2024, with improving orders and output. Indonesia’s PMI rose to 52.6, pointing to broader regional momentum beyond semiconductors and electronics.

India continues to post strong manufacturing readings. The HSBC India manufacturing PMI increased to 55.4 in January from 55, signaling solid expansion as output and domestic orders improved. Business optimism, however, remains muted, with only 15% of firms expecting higher output over the coming year. Rising input costs and limited pricing power continue to weigh on sentiment. Vietnam also entered 2026 with a healthy manufacturing backdrop. The January PMI came in at 52.5, slightly below December but still firmly expansionary, extending a run of improving operating conditions. Vietnam’s General Statistics Office estimates 2025 GDP growth at 8.02%.

One of the key question over the next few months is whether this strength reflects a durable capital expenditure and inventory cycle, or a short-lived restocking phase that fades if U.S. and European end demand softens. 
 

Book to Bill

PCB: North American PCB Industry Ends 2025 with Strong Book-to-Bill and Double-Digit Shipment Growth

EMS: EMS Industry Sees Year-end Bookings Surge, Signaling Stronger Demand Ahead

Global Sentiment

The Current Sentiment of the Global Electronics Manufacturing Supply Chain

The January 2026 Global Sentiment Report shows electronics manufacturers are operating in a high-cost, margin-compressed environment, but they expect demand and activity to improve over the next six months even as cost and recruiting pressures persist.
 

Articles 

A Global Perspective on the Future of Electronics: Skills, AI, and Supply Chain Transformation

     A new blog from the Global Electronics Association, Gaurab Majumdar 
 

Navigating the Shift: Key Trends Shaping Growth in AI and Electronics Through 2026

     A new blog from the Global Electronics Association, Shawn DuBravac 

How Technology, Materials, and Manufacturing Will Redefine 2026

     A new blog from the Global Electronics Association, Matt Kelly 

What’s Next for Global Electronics: A 2026 Outlook from East Asia

     A new blog from the Global Electronics Association, Sydney Xiao  

Resilience Through Adaptation: What to Expect from the Electronics Industry in 2026

     Predictions for 2026 from John W. Mitchell 

Social Media

The December Global Sentiment Report is in, and industry confidence in AI is high, for good reason. 

How is AI changing PCB design? That's the question behind "The Transformation of AI-Driven Electronics Design," a new white paper from the Global Electronics Association. It was developed by our Design Leadership Council, led by Peter Tranitz, head of the Association's Design Initiative. 

Upcoming Events:

• March 16–19, 2026 — APEX EXPO, Anaheim, California: The Global Electronics Association’s flagship event will feature keynote addresses from IBM Quantum’s David Lokken-Toyli, futurist Zack Kass, and Association President & CEO John W. Mitchell, offering bold insights on quantum computing, artificial intelligence, and the future of global electronics innovation. Register HERE
• April 15–16, 2026 — Elektronikmässan, Gothenburg: Christoph Solka, Director of Industry Intelligence Europe at the Global Electronics Association, will speak on “Key Developments Shaping the EMS Industry in Europe,” examining the market, policy, and supply-chain forces influencing Europe’s electronics manufacturing services sector.