Two Years After Biden Action on Defense Electronics, Will Trump Follow Through on What He Started?

Mar 26, 2025
| By Richard Cappetto

By Richard Cappetto, senior director, North American government relations

This Thursday marks two years since President Biden issued Presidential Determination 2023-06, which invoked the Defense Production Act (DPA) to catalyze U.S. investment in printed circuit board (PCB) and advanced packaging manufacturing. This action rightly identified a critical technology shortfall that, if left unaddressed, would "severely impair national defense" and undermine the warfighter.   

The Presidential Determination stemmed from President Trump’s 2017 Executive Order 13806, which launched a comprehensive assessment of the U.S. defense industrial base. A 2018 Trump administration report highlighted America’s overreliance on foreign-made PCBs, IC substrates (the materials in raw boards), and advanced packaging of semiconductor chips. The U.S. Department of Defense (DoD) continued to sound the alarm in its annual industrial capabilities reports, specifically identifying PCBs as a weak link in platforms like small, unmanned aircraft systems (drones). 

Signs of Progress   

In the two years since the Presidential Determination was issued, there have been signs of progress:  

  • Initial investments have been made: In recent years, the DoD has awarded more than $116 million in DPA funds to support PCB manufacturing. IPC member companies Calumet Electronics, GreenSource Fabrication, and TTM Technologies received funding to scale up production of cutting-edge PCBs, IC substrates, and advanced packaging.
  • Congress signaled initial support: Lawmakers approved DPA funding in FY24 for advanced packaging and PCBs, although not without a fight. IPC and its partners worked hard to preserve these investments in the face of a chips-only mentality and budgetary uncertainty.
  • More plans are in motion: Under the FY25 Continuing Resolution, the DoD is required to submit a detailed spending plan for DPA funds by May. IPC is working to ensure PCBs and related technologies are a key part of that plan, and we are advocating for robust funding in FY26 and beyond. 

Momentum at Risk  

 Despite this encouraging start, significant risks threaten to derail progress: 

 No dedicated PCB funding in the FY25 Budget: Although the Senate Appropriations Committee included $45 million for PCBs and urged continued investment in the years ahead, a final defense spending bill never materialized. Congress defaulted to a Continuing Resolution, leaving the future of PCB investments uncertain. IPC has petitioned Congress to carry forward $86 million in PCB investments in FY26, and to add PCB and PCBA manufacturing to the list of Covered Technology Categories authorized for investment under the Office of Strategic Capital. 

Missed opportunities under the CHIPS Act: While the CHIPS and Science Act has helped fuel U.S. investments in semiconductors, it has yet to be meaningfully leveraged to strengthen the PCB and PCB Assembly sectors – technologies that are indispensable to the function and reliability of every chip-based system. 

 Proposed tariffs threaten supply chains: Meanwhile, a wave of new U.S. tariffs is looming on key manufacturing inputs such as copper, aluminum, steel, and components sourced from Canada, Mexico, Asia, and Europe. These tariffs would raise costs, cause supply disruptions, and undermine U.S. manufacturing competitiveness—at a time when the industry needs stability and growth. 

 A National Security Imperative 

 The modern military depends on reliable, advanced electronics—from night vision systems to precision-guided munitions, ISR drones, command-and-control centers, and navigation systems for aircraft and ships. Yet, the U.S. continues to rely heavily on offshore sources for the PCBs and substrates that form the backbone of these systems. 

 President Trump identified this vulnerability, and President Biden’s finding was a step toward addressing it. The Congress has taken a few more initial steps.  

 But now, America is at a crossroads. The work has been done to diagnose the risk and begin remediation. It would be a grave mistake now to stop short of completing the mission. 

 The U.S. warfighter needs sustained, strategic investment not just in semiconductors, but in the entire ecosystem of electronics technologies. IPC stands ready to work with policymakers to ensure these efforts don’t stall—and that America’s defense electronics capabilities are secure, resilient, and world-class. 

 

 

Dieter Bergman IPC Fellowship Award Presented to Hiroyuki Watanabe, NEC Corporation, at IPC APEX EXPO 2025

The Dieter Bergman IPC Fellowship Award was presented to Hiroyuki Watanabe, NEC Corporation, an IPC Board Member and long-time volunteer, at IPC APEX EXPO 2025 in Anaheim, Calif. The award is given to members who have fostered a collaborative spirit, made significant contributions to standards development, and have consistently demonstrated a commitment to global standardization efforts. 

 

A member of the IPC Board of Directors since 2020, Watanabe is an expert in security and international economics. He has presented papers at IPC APEX EXPO, published white papers for the IPC Thought Leaders Program, presented at the IPC Engineering Webinar Series, held individual webinars for members in Japan, and introduced IPC’s initiatives at the Counterfeit Symposium. He serves on the IPC-1792 Cyber Security Standards Committee, is an Asia Task Group member, is an active participant in IPC’s Thought Leadership Program, and is a member of the 2-10-AT3 A-Team, The Strategy Seekers. 

 

As part of the award, Watanabe bestowed the Dieter Bergman Memorial scholarship upon Niigata University in Niigata, Japan. 

 

“Watanabe-San epitomizes the spirit of fellowship of the Dieter Bergman Fellowship Award, in leading and working with committee volunteers from around the world and is a valued board member and industry thought leader,” said John W. Mitchell, IPC president and CEO. “We are fortunate that he has chosen to share his substantial talent and expertise with IPC and the global electronics industry.”

 

 

Four Industry Leaders Receive IPC President’s Award at IPC APEX EXPO 2025

In recognition of their leadership and significant contributions of time and talent to IPC and the electronics industry, four IPC volunteers were presented with the IPC President’s Award at IPC APEX EXPO in Anaheim, Calif., on March 18, 2025. Recipients were Xaver Feiner, Zollner Elektronik AG; Thomas Marktscheffel, ASMTPT GmbH; Barry Matties, IPC Publishing Group/I-Connect007; and Cathy Hanlin, Precision Manufacturing Company Inc.

 

Xaver Feiner is an active member of the IPC Europe Advocacy Group, where he dedicates his time to advancing the position of the electronics industry and the EMS sector across Europe. He has testified before the European Commission to support Europe’s EMS industry. He is also active in IPC’s EMS Leadership Summit, working closely with other EMS leaders to bring improvements and innovation to the manufacturing process.

 

Thomas Marktscheffel shares his expertise with IPC as a member and leader of several committees and is a driving force for global industry standards such as IPC-2591 CFX and IPC-HERMES-9852. Marktscheffel has been involved with IPC standards development since 2015 when he joined the IPC-1782 A-team. He is active on A-teams for IPC-2591, IPC-HERMES-9852, IPC-2551, IPC-2552, and IPC-2553, with the overarching goal of providing standards for Factory of the Future. Currently, Marktscheffel is chair of the IPC 2-10 committee, co-chair of the IPC-2591 CFX Task Group, and chair of several A-teams.

 

Barry Matties is a leading force in publishing content about the electronics industry. I-Connect007 is the leading online media source for original electronics manufacturing supply chain content. I-Connect007 publishes multiple magazines, newsletters, books, webinars, podcasts, and real-time event coverage. For the past several years, Matties and I-Connect007 have been a valuable media partner for IPC APEX EXPO, dedicating entire issues of its trade magazines to covering the show. During APEX EXPO, I-Connect007 conducts interviews with dozens of industry leaders and multiple IPC staff and publishes the IPC APEX EXPO Show and Tell magazine, a 200-page retrospective of the show.

 

A posthumous President’s Award was presented to valued industry member, Cathy Hanlin, with Precision Manufacturing Company, Inc. Hanlin was a valued IPC/WHMA committee member whose extensive contributions to standards development are well known. She held leadership roles on 7-31F: IPC WHMA-A-620 Task Group, 7-31FT: IPC WHMA-A-620 Training Committee, 7-31FT-AT: Training Wheelz, and 5-22A- Blue Hedgehog A-Teams. 

 

“The leadership and expertise of Xaver, Thomas, Barry and Cathy have been indispensable to our industry,” said John W. Mitchell, IPC president and CEO. “We were proud to show our appreciation for their significant contributions to IPC and the global electronics industry by presenting them with the IPC President’s Award.”

IPC Honors Shennan Circuits Company and Foxconn with Corporate Recognition Awards

IPC presented its highest corporate honors to two IPC member companies, Shennan Circuits Company (SCC) and Foxconn, during the IPC Annual Meeting/Awards Ceremony at IPC APEX EXPO 2025. The Peter Sarmanian Corporate Recognition Award was presented to SCC, and the Stan Plzak Corporate Recognition Award was presented to Foxconn.

 

The Peter Samarian Corporate Recognition Award recognizes an IPC-member company in the printed circuit board (PCB) industry that has supported IPC through participation in technical and management programs while providing leadership for the industry.

 

SCC, headquartered in Shenzhen, Guangdong, China, is a leader in China’s packaging substrate field and electronic assembly manufacturing. Since 2008, SCC has actively engaged in IPC standards development and certification training. SCC embeds IPC standards into its employee training programs, strengthening professional expertise and optimizing quality management processes. They also actively participate in IPC CEMAC, a yearly event promoting international exchange and cooperation in electronics manufacturing. 

 

The IPC Stan Plzak Corporate Recognition Award honors an IPC-member company in the electronics assembly industry (EMS) that actively contributes to the industry while supporting IPC technical and management programs. 

 

Foxconn, established in Taiwan in 1974, is the largest EMS company in the world. An IPC member since 2009, Foxconn actively participates in the development of IPC standards, standards promotion, and talent development. Strong supporters of IPC’s sustainability initiative, Evolve, Foxconn developed IPC-1401 and IPC-1402, two leading sustainability standards, and the global implementation of the IPC-CFX standard. They have invested substantially in workforce development, training, and certifying professionals to IPC standards. 

 

“SCC and Foxconn have consistently provided staff resources for standards development and other IPC programs and initiatives,” said John W. Mitchell, IPC president and CEO. “Their involvement has directly contributed to IPC’s global growth in the electronics industry, and we are pleased to recognize these two strong member companies with these prestigious awards.”

 

Long-time Industry Icon Peter Bigelow Inducted into the IPC Raymond E. Pritchard Hall of Fame at IPC APEX EXPO 2025

In recognition of his extraordinary contributions to IPC and the electronics manufacturing industry, Peter Bigelow, president of FTG Circuits Haverhill, was inducted into the IPC Raymond E. Pritchard Hall of Fame at IPC APEX EXPO 2025. IPC’s most prestigious honor, the Hall of Fame Award is given to individuals who have provided exceptional service to and advancement of IPC and the electronics industry.

 

Active in the printed circuit board industry (PCB) for more than 30 years, Bigelow was honored for his enthusiastic support of IPC’s mission to serve the electronics industry as an advocate for standards development and committee programs. He served on the IPC Board of Directors for 11 years, helping to shape IPC’s strategic objectives and enhance IPC’s position as the voice for the electronics industry supply chain.

 

He has been actively involved with the PCB Management Council and numerous professional development programs and task groups, especially those related to industry compliance challenges and the development of standards that assure trusted suppliers and secure supply chains. He is also a member of the IPC Thought Leaders Program. He is a member of eight IPC committees, serving as Chair of the PCB/IMS Presidents Management Council Steering Committee. He is a member of the Government Relations Grassroots Participants, the Trusted Supplier Task Group, the Cybersecurity Protection Standard Task Group, and two IPC A-Teams.

 

Bigelow has extensive experience in general management, marketing, operations, and sales with large publicly traded and privately held manufacturing companies in the printed circuit, electronics, and instrumentation industries. He is President of FTG Circuits in Haverhill, Mass., focusing on the military, RF/ microwave, and aerospace markets. For 22 years before its acquisition by FTG, Peter was CEO of IMl, Inc., a leading AS9100, MIL, and IPC-1791 certified and ITAR-registered fabricator of PCBs and substrates. Before that, he was president of Beaver Brook Circuits.

 

“Peter has been a true leader and innovator in the global electronics industry and has made immense and long-lasting contributions to IPC and to electronics manufacturing,” said John W. Mitchell, IPC president and CEO. “We are thrilled to welcome him as the newest inductee into the IPC Hall of Fame.”

IPC Announces New Board Members at IPC APEX EXPO 2025

At the 68th IPC Annual Meeting on March 19, held in conjunction with IPC APEX EXPO 2025, the IPC Board of Directors announced new officers and first-term members. Board officers serve a two-year term, board members serve a four-year term, and the student board member serves a one-year term.

The newly elected Board officers are:

  • IPC Board Vice Chair: Peter Cleveland, Senior Vice President, TSMC

  • IPC Board Secretary/Treasurer: Paul Baldassari, President, Manufacturing and Services, Flex

First time Board members are:

  • Markus Aschenbrenner, Member of Executive Board, Zollner Elektronik AG
  • Frank McKay, Senior Vice President, Chief Supply Chain & Procurement Officer, Jabil
  • Günter Lauber, Executive Vice President and Executive Director of the Group and Chairman of Group SMT Solutions Segment, ASMPT 

Student Board member is:

  • Emily Daley, Michigan Tech University

“IPC is privileged to have these outstanding professionals on our current slate of Board members,” said John W. Mitchell, IPC president and CEO. “We look forward to working with them as we advance the global electronics industry and build electronics better.” 

In addition to Board election announcements, IPC honored three outgoing Board Members and one Student Member:

  • Cao Xi, Technical Director, Huawei Technologies Co., Ltd., for eight years for service
  • Elke Eckstein, Board Professional, Advisor, Senior Executive in Industrials, for four years for service
  • Jay Hill, Chief Operating Officer, Imaging, GE Healthcare, for seven years of service
  • Waad Tarman, Second-year Ph.D., Student, Auburn University 

Added Mitchell, “IPC expresses its sincere gratitude to Cao Xi, Elke, Jay and Waad for their dedicated service to the IPC Board. All have shared their expertise with IPC and industry – we thank them for imparting their knowledge and helping guide IPC to best serve our members and the global electronics community.”

Sustainability as a Competitive Edge: Survey Insights & IPC’s New Program to Support the Electronics Industry

Mar 18, 2025
| By Kelly Scanlon

by Dr. Kelly Scanlon, IPC Lead Sustainability Strategist

 

The electronics industry holds a dual responsibility: to create products that drive sustainable solutions to urgent global challenges and to ensure that manufacturing processes and materials minimize harm to human health and the environment. As the leading global electronics association, IPC recently surveyed the electronics industry to assess current perspectives on these commitments.

 

The survey results confirm that companies are motivated and optimistic, showing momentum in the industry.

 

  • The industry sees sustainability as a competitive advantage, with customers, regulators, investors and shareholders coming out as the top influencers of companies’ sustainability efforts.

  • Sustainability remains a priority – 59% of survey respondents said they expect their companies to increase sustainability efforts in 2025, despite political headwinds.

  • Yet, industry members said they recognize that they have challenges. Respondents emphasized the need for greater industry-wide interaction, sharing of best practices, and access to resources to identify and overcome barriers.

 

IPC is uniquely positioned to issue this survey given the breadth of the association’s membership – more than 3,000 companies – and the depth, as almost all electronics industry value chain segments are represented. We take the survey findings as input to shape and guide our work on sustainability to best support the industry and accelerate progress. That’s why I am thrilled to announce the launch of Evolve, IPC’s new program to power industry-wide sustainability.

 

Evolve builds on our past work on sustainability. It engages and empowers the industry, providing a platform for collaboration, reliable resources, and standards, intelligence, and opportunities for action.

 

As IPC’s lead sustainability strategist, I get to interact with industry leaders and learn from them what is most pressing and gather their insights as to what solutions we can provide that will help them continuously and conscientiously keep at it. I am regularly reminded of the cool things happening around new materials, more efficient manufacturing processes, new products, and new ways to reclaim and remanufacture electronics.

 

Evolve is already home to many resources for the industry right now. We are adding more in 2025 to help make progress faster.

  • Double Materiality Assessment (DMA) Toolkit: This prepares companies to evaluate financial and non-financial sustainability impacts—essential for meeting regulatory obligations. The DMA White Paper forms the foundation, outlining the process with electronics industry examples. Throughout 2025, we will add resources to the DMA Toolkit including Context Report templates, DMA Project Plans, and IRO Scoring Templates, complemented by a webinar series explaining these tools and industry best practices.

  • Guidance for greenhouse gas emissions reporting: GHG emissions represent a material topic for the electronics industry. Evolve will guide companies on Scope 3 GHG reporting obligations, helping them navigate the complex process of accounting for direct and indirect emissions from upstream and downstream activities. IPC is partnering with another electronics association to provide Scope 3 Category 1 (Purchased Goods and Services) guidance, with publication expected by end of 2025.

  • Resources for safer alternatives: The electronics industry uses potentially hazardous chemicals in manufacturing processes and products that can impact worker health and safety. Evolve helps identify safer alternatives for critical chemicals like flame retardants and PFAS, providing guidance for downstream users. IPC partnered with ChemFORWARD for a December 2024 webinar on optimizing cleaning products. We are now collaborating with the Clean Electronics Production Network to publish a Guide to Safer Alternatives in Electronics Manufacturing in Q1 2025, followed by an explanatory webinar with industry best practices planned for Q2 2025.

  • Best practices on how to circularize electronics: Ecodesign obligations require increased focus on design considerations that reduce environmental impacts throughout product lifecycles. Evolve is a circularity resource hub featuring industry best practices and a forthcoming compendium of insights on circularity challenges and solutions, with expected publication in Q2 2025.

  • Standards to support sustainability: Industry stakeholders, in collaboration with IPC, are leading the revision of existing IPC standards and creating new ones to better address relevant sustainability-related topics and help the industry. Evolve houses information about the suite of standards and a call for action to get involved with standards development.

  • Policy updates to help navigate obligations. Evolve is going to host educational webinars and events on evolving policies with potential impact on the industry. We are the reliable source for policy information. Through Evolve, we’re also calling on industry to get involved with advocacy and are looking forward to connecting.

I’m eager for IPC to be a part of the evolution, taking the accelerated path towards a sustainable future for all members of the electronics industry. As a sustainability scientist, and a lifelong sustainability enthusiast, I know that the electronics industry will benefit from having Evolve as a point of unity for continuous reinvention and renewal and that means that the industry will do more for the greater good. 

 

Electronics Manufacturers Double Down on Sustainability Efforts Despite Challenges, According to New Report

IPC launches Evolve to meet industry needs for greater collaboration, timely resources, and reliable information

Evolve debuted today at IPC APEX EXPO as a comprehensive program designed to help electronics companies move sustainability forward on an accelerated path. IPC, the global electronics association, created Evolve in direct response to research showing an increased interest across the industry in sustainability efforts and product circularity.  

Corporate sustainability initiatives are a leadership priority, not just an end goal, according to IPC’s report “Wired for Change. Electronics Industry Sentiment on Sustainability.” Nearly 60 percent of the electronics industry surveyed expect their sustainability efforts to increase over the next year, citing cost savings, operational efficiencies, and a competitive advantage as key motivators. The findings showed that sustainability is seen as a longer-term investment rather than a response to changing politics. The report also highlights industry challenges including regulatory uncertainty, the complexity of implementation, and budget concerns.

“Sustainability isn’t just about compliance—it’s about opportunity. The electronics industry has an unprecedented chance to drive innovation, improve operational efficiency, and meet the growing demand for sustainable products," said Dr. John W. Mitchell, IPC President and CEO. “Evolve integrates the health of our planet into industry progress. We believe Evolve will bring the industry together to deliver on impactful sustainability goals.”

Evolve engages and empowers the global electronics industry for a sustainable future, providing a platform to expand industry collaboration, accelerate progress and find creative solutions. Evolve offers resources on standards, intelligence, and opportunities for action.  

Specific Evolve tools and resources expected this year include: 

  • The Guide to Safer Alternatives in Electronics Manufacturing identifies safer and more sustainable alternatives for essential chemicals.  This reduces the use of chemicals considered hazardous and requires more awareness in an industry that is largely downstream users of chemicals.

  • The Double Materiality Assessment Toolkit prepares companies for a process to determine financial and non-financial sustainability impacts. IPC is adding tools to the DMA toolkit this year, including resources that will help complete a context report, and impacts, risks and opportunities (IROs).  

  • A new Scope 3 greenhouse gas reporting summary supports companies that need to account for direct and indirect emissions from upstream and downstream activities, a complex and burdensome activity.

  • A compendium of insights about circularity challenges and solutions provides details on Ecodesign obligations requiring increased attention to circular product models that increase reclamation, repairability, and recycling.

From engineers to recyclers, designers to manufacturers, Evolve is a program for anyone in the electronics manufacturing industry who is looking to identify barriers, solve problems, and build electronics better with sustainability at its core. 

“From automation to augmented reality, simulation, and regionalization — the future of manufacturing is driven by sustainability. I am delighted by IPC's continuous efforts to support the industry on this path and accelerate progress,” said Paul Baldassari, President of Global Manufacturing Services, Flex. “As the survey findings show, there are real challenges to implementation that we can only solve if the industry works together.” 

“The launch of IPC’s Evolve initiative signifies an important step forward in our industry’s commitment to sustainability,” said Tom Edman, President and CEO, TTM Technologies Inc. “At TTM, we are excited to join Evolve this year and our participation reflects our dedication to evolving with purpose and leading with integrity towards a more sustainable future.”

 IPC has an extensive history of engaging with the industry on sustainability, including determining solutions that help address known challenges, and Evolve builds on this effort. The new program provides the industry with a place for industry collaboration and sharing of best practices to ensure the electronics industry can progress in parallel with protecting the planet. 

Read the full report and find sustainability resources at ipc.org/evolve.  

EMS Industry Navigates Economic Uncertainty and Shifting Global Trade Policies

Mar 17, 2025

By Philip Stoten and Shawn DuBravac, following the March episode of the EMS & The Economist Podcast

The electronics manufacturing services (EMS) sector continues to show resilience despite facing significant headwinds from unpredictable trade policies and economic uncertainty. Industry metrics remain strong, with both EMS and PCB book-to-bill ratios showing positive performance, though questions linger about sustainability as global tensions escalate.

Book-to-Bill Ratios and Order Patterns

Recent surveys reveal interesting dynamics affecting the industry's performance metrics. "The book-to-bill both for EMS and PCB have been pretty strong," notes DuBravac, though he cautions these numbers might be artificially inflated due to companies "pulling forward orders" to get ahead of tariff implementation.

This pattern extends beyond electronics. "If you look at the import numbers in aggregate, we've had very strong import numbers that will weigh on the GDP in the first quarter," DuBravac explains. Despite these concerns, companies report positive activity. "The numbers have held up okay and look pretty strong. The companies I speak with are seeing a lot of activity and interest."

Economic Uncertainty Clouds Outlook

Market volatility and recession concerns have recently intensified, creating a challenging environment for long-term planning. "Any time you see uncertainty, that causes companies to pause, especially when it comes to bigger, longer-term, longer-horizon investments," DuBravac observes.

The US economy shows mixed signals. "Despite all of the uncertainty, the underlying economy is holding up okay," notes DuBravac, though he acknowledges that "the probability of a recession over the next 12 months has increased." Employment numbers remain within a comfortable range despite significant government layoffs, but the question remains whether these will eventually impact other sectors.

The apparent indifference from the White House regarding recession risks compounds these concerns. Statements suggesting "maybe there's some short-term pain that we're going to feel" have fueled market anxieties rather than calming them.

In Europe, sentiment is improving, with expectations shifting from last year's double-digit decline to potential single-digit growth in 2025. "In Europe, people are more positive about '25 than they were about '24," Stoten explains. "We saw that double-digit decline last year. We're looking at maybe a single-digit improvement this year, which I think everybody would be happy with."

Tariff Complications Disrupting Supply Chains

The most significant challenge facing manufacturers is the constantly shifting landscape of tariffs. Recent policy changes have created a complex web of regulations that manufacturers must navigate, particularly those operating across North American borders.

"It's really hard. If I'm a contract manufacturer in Mexico or just across the border in Toronto, I don't know what to think," Stoten observes. "We get a tariff that comes on, it's delayed for a month, we get a month down the line, it goes back on again and then we get exemptions for everything that was inside the USMCA. It's a big challenge in terms of planning their business."

The USMCA exemptions have introduced additional complications. "USMCA only covered about 50% of the imports that were coming through Mexico and even less coming through Canada," DuBravac explains. "Now there's this gray zone as well, what does this mean for things like Mexican beer or Canadian beer and what does it mean for computers or mobile phones or some other categories that now get kind of caught up in that gray area?"

Companies that were considering investments in these regions are now reconsidering their options, with some potentially looking at lower-cost US states instead.

Shifting US-Europe Relations

The evolving relationship between the US and Europe represents another significant variable. European countries have recently shown increased willingness to invest in defense, raising debt ceilings and adjusting borrowing rules.

"We've had this news that there's going to be more spending on defense. There's been debt ceilings raised in a lot of the European countries, including from the EU itself, as to what can be rules on what can be borrowed and if it's being borrowed for defense, that seems to be pretty limitless at the moment," notes Stoten.

However, industry observers anticipate that European countries could be the next target for US tariffs. "I think it's hard to imagine that the Trump administration doesn't turn more attention to Europe and look to impose tariffs," DuBravac predicts. He describes tariffs as "the negotiating leverage that the administration wants to use" and "the easy button" to achieve broader objectives.

The relationship between the US and Europe appears increasingly strained. "Europe's very sensitive to not just what the US says but the way it says it, and the way it's saying it now is somewhat different to, perhaps, the way it said things in the past," Stoten observes.

The potential Ukraine-Russia ceasefire adds another layer of complexity. It raises questions about whether European defense investments will continue. "Will a ceasefire remove some of the wind from that sail, or will Europeans continue to want to invest in defense?" DuBravac wonders.

Technology as the Growth Engine

Despite geopolitical complications, technological innovation continues to drive fundamental growth in the electronics sector. Significant developments in AI and new hardware are creating sustained demand for manufacturing services.

"There is a lot happening in technology right now, which can sometimes be overlooked because of all of the geopolitical dynamics," DuBravac points out. "I'm just back from MWC and you see tremendous appetite and growth in new devices and applications. We are seeing real progress in a lot of areas."

AI represents a "game-changing technology" with substantial implications—not just as a transformative technology but also as a major energy consumer, creating additional opportunities for electronic manufacturing.

Looking Ahead

As the industry prepares for upcoming gatherings like APEX, stakeholders will be closely monitoring sentiment indicators and reassessing growth projections. Success will likely depend on maintaining flexibility in an increasingly unpredictable environment.

Those able to adapt to shifting trade policies while capitalizing on technological opportunities—particularly in growth areas like AI and defense—may find ways to thrive despite the challenging landscape. The underlying technological transformations powering the industry continue unabated, providing a solid foundation despite the turbulent geopolitical environment.

Philip Stoten is a journalist and the host of the "EMS & The Economist" and “EMS@C-Level” podcasts. Shawn DuBravac is the Chief Economist at the IPC, an author, futurist, and renowned speaker. This article is based on a recent episode of the EMS & The Economist Podcast.

Video and audio versions are available at https://youtu.be/PbLg761mJe8 and https://www.buzzsprout.com/1251833/episodes/16778866 or wherever you get your podcast by searching ‘EMS@C-Level’.

European Defence Industry Faces Critical Need for Electronics Made in Europe, According to New Report

  • Electronics to represent 25 percent of the value of defence equipment by 2035-2040, yet electronics manufacturing in Europe has shrunk by 35 percent over the last two decades
  • Growing risk for increased delivery time for essential equipment including drones, radar systems, and secure communications
  • Key segments of the electronics value chain continue to lose global market share compromising European security and strategic autonomy
  • Urgent action is required by EU and member states to stabilize and grow defence electronics industrial base or face greater reliance on increasingly fragile global supply chain

Europe is becoming more reliant on electronics manufactured outside of Europe, potentially leading to vulnerabilities that impact regional security, according to a new report by IPC, the global electronics association together with DECISION Etudes & Conseil. The report, "Securing the Electronics Value Chain: The Blind Spot in the European Union’s Industrial Defence Strategy?" warns that without urgent action to strengthen the European electronics manufacturing ecosystem, the region could be critically vulnerable to supply chain disruptions for important equipment including drones, radar systems and secure communications. The report outlines 13 actionable policy recommendations, including an urgent review of electronics capacity, new financing allocations, increased European defense production, and improved access and scaling opportunities for SMEs.

 

European defence readiness has never been a greater priority, but key links in the defence industry’s value chain might still leave it critically vulnerable. Electronics are now foundational to the manufacturing across all industries, including defence. They now account for 17% of defence equipment value, up from 10% in 2000, and are projected to reach 25% by 2035-2040. The growing importance of electronics in defence is seen in platform upgrades for fighter jets, military communications, missiles or radar systems. Despite this, Europe’s electronics manufacturing base has shrunk dramatically, with its share of global electronics production down more than 35%, to just 11.6% of global electronics production in 2023. 

 

“Europe’s security and defence readiness will increasingly be determined by our ability to produce critical electronics in Europe, yet that is where we are vulnerable,” said Alison James, Senior Director, European Government Relations, IPC. “Without a resilient electronics supply chain, there is no resilient European defence sector. The defence sector is of immediate strategic importance for Europe to face the new realities of geopolitical shifts. The report calls on the EU to embed electronics at the core of its future defence industrial policies as steps are taken to build out the region’s industrial base”. 

 

The study highlights three high-risk layers of the electronics value chain:

  • Advanced packaging: only 8% of global defence-related production occurs in the EU.
  • Printed Circuit Boards (PCBs): just 6% of global defence-related PCBs are produced in Europe while the PCB industry is at a critical juncture with a risk of disappearing entirely from the region.
  • IC substrates: only 4% of global defence-related production takes place in the EU.

The European Electronics Manufacturing Industry has called for an Electronics Manufacturing Strategy to support a sector crucial to meeting Europe’s industrial and regional security needs. Electronics manufacturing is a horizontal industry enabling not just the defence industry, but innovation and manufacturing across every sector of Europe’s economy. Electronics are essential to secure and reliable defence and aerospace systems, medical technologies, and communications infrastructure. Moreover, electronics are crucial for the digital and green transitions and a necessity for a great majority of products to sustain modern daily life.

 

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