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36 SMT007 MAGAZINE I SEPTEMBER 2023 est in new EU policy measures to strengthen the global compet- itiveness of the European PCB and EMS industries. is article draws on sur- vey results, expert opinion, and cross-sectoral dialogue to assess the state of the PCB and EMS industries and lays out options for EU policymakers to pursue a sil- icon-to-systems industrial strat- egy. A silicon-to-systems indus- trial strategy is a government policy focused on cultivating a robust ecosystem of semicon- ductor, PCB, EMS, and supplier companies capable of producing electronics systems nec- essary for Europe's regional security and eco- nomic competitiveness. Report Background and Survey Results e European Commission's Directorate General for Internal Market, Industry, Entre- preneurship and SMEs (DG GROW) led a workshop and structured dialogue on June 23, 2023, focused on how to support the resilience of the electronics value chain. At the meeting, a working group of stakeholders was established and tasked with producing this industry report outlining the critical nature of the electron- ics assembly sector in European value chains; an analysis of PCB and EMS strengths, weak- nesses, opportunities, and threats (SWOT); and policy recommendations for future actions and initiatives at the European level. As part of this research, the working group fielded a survey to companies, associations, and other stakeholders. e survey received 122 responses from PCB companies (34% of respondents), EMS (34%), OEM (18%), and other stakeholders including trade unions (14%). Half (50%) of respondents employ more than 250 workers, and nearly a quarter (23%) report annual global revenue in excess of €500 million. The respondents collectively report having manufacturing operations in all EU member states. Downstream Implications European companies were once market leaders in electron- ics manufacturing, but fierce competition from Asia and else- where has led them to specialize in higher-value, lower-volume production, including embedded systems found in medical tech- nologies, industrial equipment, defence, space, aerospace, and automobiles. But by ceding to Asia the vol- ume manufacturing, largely associated with consumer products, European electronics manufacturers have seen their overall market share and profitability decline. is decline in profitability has significant implications for supply chain resiliency and technological sov- ereignty. Embedded systems are a growth market as electronics become integral to just about everything, fueling industry's digital and green transitions. For Europe's global leadership in key market segments—like clean energy, con- nected and autonomous mobility, industrial Internet of ings (IoT), Industry 4.0, and cybersecurity—it increasingly makes sense to locate related manufacturing activities in close proximity. ese markets have specific produc- tion needs that can make interaction between customer and supplier important, if not essen- tial. To meet regional defence and space requirements, this becomes ever more criti- cal, particularly as data protection and secu- rity are paramount in these industries. Global supply chain volatility, escalating trade wars, health crises, and natural disasters under- score the importance of resilient regional sup- ply chains. Companies are increasingly tak- ing steps to diversify and regionalise their sup- ply chains because their existing supply chains have growing exposure to these risks. e EU nonetheless has—and risks future— increasing international dependencies for PCB and EMS. e loss of volume for PCB manufacturers has led to insufficient capac- Alison James