Europe’s Electronics Sector Picks Up Speed

Download this article in PDF format.

Europe’s electronics distribution market is picking up, with the activity coming from multiple sources. As demand moves across different regions and product categories some segments are doing more of the work than others. There’s now more business flowing through the channel and distributors are starting to feel the positive impacts.

Component sales in the EU picked up late last year across semiconductors and interconnect, passive and electromechanical products. Demand tied to defense electronics is also pushing orders higher for sensor-driven systems. Companies are also paying closer attention to where components come from and how much production stays closer to home, and new partnerships are extending distribution reach across Europe.

Signs Point to Market Recovery

According to DMASS Europe e.V., EU electronic components distribution closed out 2025 on a strong note, with fourth-quarter sales rising 9.8% to €3.77 billion ($4.09 billion U.S.). Semiconductor revenue increased 7.7% to €2.30 billion ($2.50 billion), while interconnect, passive and electromechanical products climbed 13.3% to €1.47 billion ($1.60 billion). The fourth-quarter lift pushed second-half results up 6.9%, indicating more consistent activity market-wide.

DMASS says the activity carried across both product segments and key regions, and that semiconductors posted solid gains overall. There was stronger performance in markets like Turkey, Germany, Benelux and the UK, it adds, while memory, sensors and logic products outperformed the broader segment. Interconnect, passive and electromechanical products also posted solid gains, with demand coming through in passives and electromechanical components.

“After a long period of stagnation, the market is regaining momentum,” Chairman Hermann Reiter said in a press release. “A strong fourth quarter and a 6.9% increase in the second half of 2025 mark a decisive turnaround, and hopes for further improvement now outweigh the concerns.”

Defense Demand Builds

European defense electronics manufacturers are reporting record orders as military spending accelerates across the continent, Astute Electronics Ltd writes in “Europe’s Defence Electronics Boom Drives Record Orders but Strains Component Supply Chains.” It says increasing demand for radar systems, sensors and optoelectronics is also placing new pressure on component supply chains.

Component supply remains a constraint despite the strong order pipeline, Reuters reports, with “supply chain constraints and staffing bottlenecks” slowing the conversion of orders into revenue. It adds that these limitations are affecting production schedules even as manufacturers expand capacity and hiring.

Citing an eeNews Europe report, Astute says Europe’s domestic manufacturing base for key electronics segments—including printed circuit boards, chip substrates and advanced packaging—has shrunk by more than 35% over the past two decades. “That imbalance increases reliance on external suppliers for components used in radar modules, RF systems and secure communications hardware,” it adds, noting that manufacturers expect demand to remain strong despite current bottlenecks.

Policy Push Expands Focus Beyond Chips

In other EU electronics news, the Global Electronics Association is urging the European Commission to broaden the scope of the Chips Act beyond semiconductor fabrication to include the full electronics value chain, including printed circuit boards, assemblies and final system integration.

The group says the current approach leaves gaps in how chips are turned into finished products used across critical industries. The GEA points to a decline in Europe’s system-level manufacturing over the past two decades, which has increased reliance on external suppliers for key technologies used in defense, automotive, industrial automation and AI applications.

“Europe cannot achieve technological resilience without rebuilding the full electronics value chain,” the association says, adding that stronger support for system-level manufacturing will be needed to reduce dependencies and support long-term competitiveness.

Spotlight on Poland

As companies reassess their supply chain strategies in the wake of recent geopolitical tensions, rising shipping costs, and the need for greater operational agility, OnPattison.com says Poland has emerged as a manufacturing powerhouse.

“For American and Western European OEMs seeking reliable, cost-effective, and high-quality electronics production, Poland offers a compelling value proposition that combines technical expertise, strategic geographic positioning, and a business-friendly environment,” it says. “This shift represents more than just a trend. It's a fundamental realignment of how global electronics manufacturing operates.”

Poland sits at the geographic heart of Europe, providing manufacturers with access to the continent's 450 million consumers. The country has invested heavily in advanced manufacturing infrastructure over the past two decades, creating a sophisticated ecosystem that can handle complex, high-mix production requirements, the publication adds.

In March, SEMI Europe signed a two-year agreement with the Polish Taiwanese Chamber of Commerce to support semiconductor development in Poland and strengthen ties between the regions, with a focus on joint initiatives, industry collaboration and investment.

“This partnership marks an important milestone in deepening economic collaboration and creating new opportunities for businesses across Europe,” said SEMI Europe’s President Laith Altimime in a press release. “By combining our expertise and resources, we aim to foster collaboration, drive innovation, and deliver meaningful value to our members.”