The European PCB and Electronics Industries Score a Major Win in Chips 2.0 Milestone

Estimated reading time: 4 minutes

Anyone in the PCB industry knows the frustration: Electronics policy discussions often begin and end with semiconductors. Yet chips don't function in a vacuum, and policymakers are increasingly recognizing that reality. For years, the PCB industry has argued that electronics manufacturing is about far more than chips alone. Now, the European Union appears to be listening. In a milestone development for the electronics ecosystem, the EU’s proposed Chips Act 2.0 expands its focus beyond semiconductors to include electronics manufacturing, explicitly naming PCBs, PCB integration, IC substrates, advanced packaging, and system integration as strategic technologies.

Following a recent announcement in Brussels, I visited with Alison James, senior director of government relations in Europe for the Global Electronics Association, to discuss what this achievement means, why it matters, and how years of advocacy have helped elevate PCB manufacturing from an overlooked supply-chain component to a recognized pillar of Europe's industrial and defense strategy.

Marcy LaRont: Alison, tell me more about the EU's announcement on the Chips Act 2.0. Why is it important to the electronics industry?

Alison James: The announcement was that the new Chips Act 2.0 takes a broader ecosystem approach beyond semiconductors, which is something we've been advocating for. Under the First of a Kind provision that enables Member States to support production capacity, the legislation now includes electronics manufacturing. That explicitly includes PCB manufacturing and integration, IC substrates, advanced packaging, and system integration.

LaRont: Having PCBs explicitly named in major legislation is a significant development.

James: It is. PCB manufacturing and integration are specifically included in the European Chips Act, and that represents an important recognition of the role the broader electronics ecosystem plays in technology and industrial competitiveness.

LaRont: To understand why this matters, let's step back. Can you explain the significance of the European Defence Industrial Strategy?

James: The Strategy was the first attempt at the European level to strengthen and coordinate Europe's defense industrial base. Defense remains a national responsibility, but the markets are fragmented. The strategy seeks to create greater economies of scale and identify areas where Europe needs stronger industrial capabilities.

Out of that came the European Defence Industry Programme (EDIP), which identifies strategically important areas and provides funding for production-capacity expansion. Importantly, key electronic components, including printed circuit boards and IC substrates, are explicitly identified as eligible areas for support. The announcement of the EDIP Programme is separate to the European Chips Act and came a few weeks ago. The call for proposals opens at the end of June. This means there is now a specific defense industrial instrument to build capacity, which is open to electronics manufacturers, including PCB, and a new proposed Chips Act, which also opens the door to production capacity funding at the national level once approved and implemented. 

LaRont: Isn’t this EDIP funding specifically for production capacity, not R&D?

James: Correct. That's a critical distinction. Europe has historically funded research and development. This is funding for manufacturing capacity itself, something we know is desperately needed in Europe. The Chips Act inclusion also relates to manufacturing capacity when it is First of a Kind.

LaRont: What is the technological sovereignty package, which was included in last week’s announcement?

James: It is a broader package of measures designed to strengthen Europe's technology base. It includes Chips Act 2.0, cloud and AI initiatives, open-source strategies, and a communication on technological sovereignty.

LaRont: What has changed in recent years to create momentum behind these initiatives?

James: Geopolitical changes and the growing importance of defense have been major catalysts. COVID exposed supply-chain vulnerabilities, and the war in Ukraine reinforced concerns about strategic dependencies.

Historically, Europe relied heavily on global trade and imports. Today, there is growing recognition that certain critical capabilities must exist within Europe and partner nations. Electronics sits at the center of critical infrastructure, defense systems, and industrial supply chains. Maintaining manufacturing capacity and technical know-how has become a strategic priority. This is what the Global Electronics Association, together with our members and partners, has been highlighting and advocating for in recent years. We are thankful that this approach is now being reflected in EU policies and proposals.

LaRont: The EU has discussed targets around sourcing from European suppliers. Is this restricted to EU members or does it apply to EU-approved partners?

James:  The recommendation is not about closing markets. Europe remains committed to international trade. The objective is to ensure that a meaningful portion of critical technologies can be sourced from Europe and trusted partners rather than relying entirely on imports.

LaRont: You've been involved in these efforts for years. What has been the biggest challenge?

James: The biggest challenge has been helping policymakers understand the complexity of the electronics ecosystem. Building consensus within the European Union requires engaging many stakeholders and explaining why these technologies matter strategically and economically. The recent progress reflects years of advocacy and growing awareness of supply-chain resilience, security, and industrial competitiveness.

LaRont: The recent announcement is a significant progress milestone, but there are still many steps in the process to get Chips 2.0 passed. What’s next?

James: The proposal now moves to the European Parliament and the Council, where Member States and lawmakers will review, negotiate, and potentially amend the legislation. That process will likely continue into next year before final adoption. The earliest it could be adopted could be next year. Significant discourse and exchange will happen between EU members and stakeholders throughout the next few months. It will be an active and ongoing process.

LaRont: Alison, do you have any final thoughts you’d like to share about this new legislation?

James: Both EDIP and the European Chips Act are very significant milestones, but this is only the beginning. Recognition and inclusion in the legal framework at the EU level is essential, as the Chips Act enables Member States to fund First of a Kind electronics manufacturing. However, implementation matters. Industry must remain engaged in the next steps because the Member States need to fully recognize the importance of the broader electronics ecosystem and devise electronics strategies as well as funding to bolster needed capacities and capabilities in the region.

LaRont:  Thank you, Alison, and continued good luck as this important effort moves forward.