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6 SMT007 MAGAZINE I MARCH 2026 Our SPOTLIGHT on EUROPE The European PCB industry has faced a prolonged decline over the past two decades. Reporting on the EIPC Winter Conference in Janu- ary, Pete Starkey wrote: "Europe's industrial recession continues. Germa- ny's manufacturing sector has been in continuing decline since mid-2022, and corporate bankrupt- cies are at a 10-year high. UK electronics sales are down, and France is showing slight signs of recovery after three years of decline. (Presenter Jonathan) 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. Pre- dictably, the defence sector, with turnover up by 13.8% and employment up by 8.6%, is perform- ing well. 'Europe's electronics industry is shrink- ing in volume but growing in strategic importance,' Custer said." Custer believes that the European PCB industry is set for steady growth, supported by innovation and localized production, but companies are navi- gating uncertainties. "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," Starkey wrote. There are several ongoing themes for PCB man- ufacturing in the European Union, including Asian competition on price, supply chain volatility, regu- latory compliance and environmental standards, fragmented capacity leading to strategic depen- dency, and the rise of capital intensity due to tech- N O L A N ' S N OT E S BY N O L A N J O H N SO N , I- CO N N ECT0 07