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36 SMT007 MAGAZINE I MARCH 2026 ment, and achievements of his predeces- sor Alun Morgan. Schlüter's keynote focused on the ongoing campaign to raise aware- ness among EU politicians to recognise, evaluate, and support the complete electronics supply chain in Europe, especially the PCB and EMS industries and their suppliers, as well as the domes- tic semiconductor industry. He high- lighted the challenges in the raw material supply chain facing the European PCB indus- try in 2026. Schlüter hopes that when the 2026 EU Chip Act 2.0 review is published, the complete ecosystem, including PCB and EMS, might be acknowledged and some incentives and actions be offered to support our industry. He recommended that manu- facturers make longer-term agreements with raw material suppliers to secure their supply chain on a realistic basis. Business Outlook The session on business outlook and new oppor- tunities was moderated by EIPC technical direc- tor Tarja Rapala-Virtanen, who introduced the time- honoured and much anticipated Custer Consulting Group Business Outlook in Europe, presented in video by Jonathan Custer. Custer said the global AI boom is reshaping the semiconductor landscape, driving unprece- dented growth and investment, but also strain- ing supplies of advanced materials and exposing critical supply chain bottlenecks that might limit expansion in 2026. Material shortages and capacity shifts are key constraints, making supply chains, not demand, the defin- ing risk for 2026. Additionally, trade wars and tariff walls are causing geopolitical fractures. In 2025, Custer reported that the global economy experienced moderate growth, estimated at 3–3.5% in GDP, and reflect- ing uneven performance across regions, with the United States around 2–2.5%, China around 4–4.5%, Europe between 1–2%, and strong perfor- mance in Southeast Asia, India, and Latin America. Against this back- ground of resilient yet uneven growth, technology, renewable energy, and emerging markets were seen as key growth engines, with high costs, geopolitical uncer- tainty, and inflation shaping risks and opportunities worldwide. Europe's industrial recession contin- ues. Germany's manufacturing sector has been in continuing decline since mid-2022, and corporate bankruptcies are at a 10-year high. UK electronics sales are down, and France is showing slight signs of recovery after three years of decline. Custer observed that while general manufacturing continues to contract in Western Europe, the trend is toward the industrialisation of Eastern Europe, yet R&D and the manufacture of complex systems remain in Western Europe. Predictably, the defence sector, with turnover up by 13.8% and employment up by 8.6%, is performing well. "Europe's electron- ics industry is shrinking in volume but growing in strategic importance," he said. Custer believes the European PCB industry is set for steady growth, supported by innovation and localised production, but that companies must navi- gate regulatory and geopolitical uncertainties to remain competitive. Supply chain vulnerability is a serious consideration, particularly since the Euro- pean industry now has a 100% dependency on non-European materials, and prices are subject to severe inflation. He referred to the new Teltonika PCB plant in Lithuania as an example of how a strategy of vertical integration could reverse the trend. The concept of building a complete vertically integrated ecosystem under one roof has reduced Asian supply chain reli- ance and increased security. Custer considers AI the organis- ing principle for 2026, with global semiconductor revenue nearing $1 trillion and logic and memory prices R i c o S c h l ü te r Ta rj a R a p a l a - V i r t a n e n