Europe Is Writing New Rules For Chips, Defense And EV Supply Chains: Alison James, Global Electronics Association

Energy prices can spike overnight, shipping lanes can become political flashpoints, and suddenly the “normal” electronics supply chain starts to look fragile. I sit down with Alison James, Senior Director for European Government Relations at the Global Electronics Association to talk through what the latest geopolitical tensions could mean for European manufacturing, including the quiet but critical dependencies many people forget, like petrochemicals across the electronics value chain and helium for the semiconductor industry.

From there, we move into the policy engine room: the European Chips Act review and the next proposal expected from the European Commission as part of a broader tech sovereignty package. We unpack why this matters beyond semiconductor fabs, and why printed circuit boards, EMS, IC substrates, and advanced packaging have to be in the conversation if Europe wants real supply chain resilience instead of isolated capacity.

We also dig into the surge in defense-driven demand and what it means that Europe’s first defense industry program explicitly includes electronics capacity building, with funding and a call that names PCBs and IC substrates. 

Then we turn to automotive, where EV competition and new “Made In Europe” style procurement rules could reshape sourcing decisions, define what “origin” means, and create tough trade-offs across a global electronics ecosystem. If you care about European electronics manufacturing, industrial strategy, or how policy becomes real constraints and real opportunity, this is a practical roadmap. Subscribe, share this with a colleague, and leave a review with the one policy change you think would help most.

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Transcript

Geopolitics And Supply Chain Risk

Philip Stoten, Journalist and Podcast Host 0:08

Hello, I'm Philip Stoughton from My House to Yours. Welcome to EMS at Sea Level. I am joined by Alison James from the Global Electronics Association. Alison, thanks so much for talking to me. Um every morning I listen to my daily uh news podcasts, and we're listening to what's happening in Iran and what impact it's having on geopolitics everywhere else in the world, but also on the supply chain with the Hamush Strait and everything that's going on there. I assume that was a big part of the discussions you were having when you were in Apex last month, but also discussions that you've had amongst the team and amongst your colleagues in Brussels since then.

Alison James, Senior Director Europe, Government Relations, Global Electronics Association 0:50

Oh, in increasingly, Phil. So that happened, obviously, that was going on while we were in the US, and that was very much a focus for conversation. It's still going on, everyone's still questioning ultimately what the effects will be on the supply chain. We know the potential already energy costs, that's a clear one. But of course, oil is has so many downstream uses. And we've also got the helium for semiconductor industry. So there's a lot of risk there and a lot of risks that can come into play for the electronics industry, depending how long this goes on. Um but I think we're not hearing yet from companies that they're directly seeing beyond the energy cost, that they're directly seeing the impact of the supply chain. But we are we're following that very closely, and everyone knows however long this goes on, the the risks increase because oil and petrochemicals are ubiquitous throughout the industry.

Philip Stoten, Journalist and Podcast Host 1:39

Yeah, absolutely. And I think the you know the energy cost has been a challenge for the European Union and the European um manufacturing supply chain prior to this. So actually, a a shock in that cost is just uh, you know, it's the double blow, isn't it? So it's it's really substantial.

Alison James, Senior Director Europe, Government Relations, Global Electronics Association 1:56

The last thing industry needs is another hike in energy costs in the region. Yes, already just yeah.

Where The EU Chips Act Stands

Philip Stoten, Journalist and Podcast Host 2:02

Yeah, a big challenge. Last time we um met face to face, it was in Munich at Productronica, and we were talking about the consultation period for the European Chips Chips Act. That happened. Uh where are we with that process now and what happens next from the uh from the European Commission?

Alison James, Senior Director Europe, Government Relations, Global Electronics Association 2:22

Okay, so the consultation process carried on until the end of the year, really November. I think in the last time we met, we talked about the the workshop that we hosted and organized with the European Commission for the printed circuit board and EMS industry. So that was really to provide a platform for the views of the industry in the official review of the European CHIPS Act. So we were very pleased that the European Commission opened that to us to make sure that the interests of printed circuit boards and EMS companies were heard in the consultation process. So that consultation process closed at the end of the year, and we're now expecting the proposal from the European Commission to come out at the end of May. That's the latest news. And it will come out as part of a broader, they're calling it a tech sovereignty package. So there are other measures in there also on um uh data centers and an AI, the Cloud and AI Development Act. So it will come out as part of a package. It's been delayed a couple of times. It's a complex dossier because several initiatives are mixed into one and merged into one, but uh, we expect it at the end of May at this stage. The proposal, which then has to be discussed by the European Parliament, by the Council, and that process begins.

Defense Funding For Electronics Capacity

Philip Stoten, Journalist and Podcast Host 3:32

Yeah. And beyond that, when I look at specific industries, you already mentioned the uh AI and data center industry, that's a booming industry. As a um as a result of the geopolitical shifts, we're seeing a huge uh influx of defense business, and we're seeing Europe think much more about how it funds its own um defense strategy. What instruments are are in place for that, and how does that affect the electronic manufacturing supply chain?

Made In Europe Rules For EVs

Alison James, Senior Director Europe, Government Relations, Global Electronics Association 4:01

Well, again, critically important. You know, we've been arguing for a number of years that we need to have funding and we need capacity building for the European electronics manufacturers. And you know that I think it was last year already we came out with this study on defense as the European Union came in with its first defense industrial programs. And we talked about the need for capacity building in printed circuit boards and IC substrates across the board, electronic assembly and advanced packaging. So I we're very pleased that last week the first European defense industry program came out, the work program, and they have included very importantly, electronics as an area for capacity building, and they put forward a budget for that, which is 122 million. The first call the call is coming out in June, and it specifically includes printed circuit boards and IC substrate. So they are eligible for capacity building for modernization as part of that call. So that's a big move. It's the the first European defense industry program. We did ask for industrial reinforcement for electronics. That's happened in this call. So I I hope, you know, we hope that that will be uh I think it will be helpful for the industry to hopefully have further initiatives.

Philip Stoten, Journalist and Podcast Host 5:17

Yeah, Alison, you and the team should be really proud of that. That's uh that's a real success story. One of the other sectors that that has been really fascinating to watch over the last few years in in uh Europe has been the automotive industry. As we switch from internal combustion to EV, we've seen influxes of vehicles from different regions in the world, we've seen different industries in Europe challenged some more than others, and the relationship between car makers and the EMS industry and the supply chain change generally. How has the European Union looked at that and what instruments and strategies are in place specifically for the automotive industry? Because it's a it's a sector so much of so much of the uh the economy in Europe, particularly in Germany, is dependent on.

Alison James, Senior Director Europe, Government Relations, Global Electronics Association 6:05

Yeah, it it is, and it has been identified as a priority by the European Commission, and they did put in place at the beginning of the year, I think, an automotive action plan. They're already beginning to discuss a lot more programs, what's needed to bolster the industry. But, you know, it's a little bit disparate. So there are several instruments in place, and very recently, I think just a couple of weeks ago, we saw specifically on the automotive side the beginning of these made in Europe um proposals that we've been talking about previously. So there is a proposal, it's part of what they call the Industrial Accelerator Act, which is the first made in Europe package, if you like. And while it largely concerns, you know, energy-intensive industries and net zero industries, it does contain made in Europe requirements for electric vehicles. So this is a proposal where any electric vehicle, you know, rent higher certain categories of electric vehicles, for them to benefit from subsidies in public procurement, then they would have to meet certain union origin requirements. And that's where we start seeing language going in there on 70% of components, components being everything that goes into the car, not only electronics, right? But also language on in several years' time, that there would be, you know, 50% of the X works would have to consider, you know, would have to be also electronic systems, which are made in the union, but not only in the union, also with partner countries. So this is where the discussion becomes complex again because partner countries, what are they? Countries with whom the European Union has a trade agreement, has a public procurement agreement. So this is where the discussion is beginning. And it's uh an effort, and certainly on the part of um the automotive suppliers in the European Union to get an instrument that would actually drive and maintain competition in the in the European Union for the automotive supply industry. And it will be hot potato, and I think a lot of discussions politically on how this will go, but that's very recent.

Philip Stoten, Journalist and Podcast Host 8:02

Yeah, and that's very it's very significant, isn't it? As you look through the um the supply chain for uh for uh the automotive industry, and it has changed, not just thinking about where things come from and the sovereignty within Europe, but thinking about where those trading relationships are. And we're in a time where some trading relationships internationally have been substantially damaged, and some new trading relationships have been um substantially bolstered. So it's it's a it's a real-time of flux, and making sure that the instrument fits all that is is actually pretty complex for the entire supply chain, but specifically for the electronic supply chain, which is global and ultra.

Alison James, Senior Director Europe, Government Relations, Global Electronics Association 8:45

Absolutely.

Philip Stoten, Journalist and Podcast Host 8:46

Yeah, so some big challenges.

Alison James, Senior Director Europe, Government Relations, Global Electronics Association 8:48

Yeah, so as we said, a number of different instruments that are being discussed and coming in at the same time. So I think the next couple of months are going to be uh pretty key in terms of what will happen for the electronics industry, how can bolster an industrial base, but also make sure that the inputs that that are needed are there also through trading relations with um regions because you know, as we as we know, no one is attempting to make everything within the region, but you need to bolster for critical industries and what's needed for those industries. And for us, it's really about supply chain resilience and and making sure that those inputs are available, especially for critical industries.

Philip Stoten, Journalist and Podcast Host 9:24

Yeah, and building build building that supply chain where we can build it and where we where we know it's sensible to invest. And I think what's interesting when you look at those procurement strategies, it's all about demand instruments and supply instruments, it's how do we how do we help both sides? It's it's quite a complex puzzle to bring all that together, and that's something you have to be completely on top of the whole time.

Alison James, Senior Director Europe, Government Relations, Global Electronics Association 9:46

Exactly. And that's why we've always called for an electronics industrial strategy, which has demand instruments and supply instruments and tax energy prices. We know there isn't one silver bullet, there's a series of initiatives that need to take place simultaneously, and that is always the message that we give to the European Commission. You know, we can give money to manufacturing and we want money to go towards critical manufacturing, but indeed, if there's no secure demand at the same time and energy prices are sky high and we don't have the workforce available, all of that needs to happen simultaneously. That there's a holistic overview and a holistic strategy, and that's what we have been calling for for a number of years. And I think we still uh there's still some way to go.

What The Association Does Next

Philip Stoten, Journalist and Podcast Host 10:27

Continue to do that. Yeah, and I think what's interesting, Alison, is you are at this pivotal point of communication in both directions. So much as you're telling the European Union what the industry needs, you have to then come out and tell the industry what is going on in the union, what's coming down the track, what they should be looking out for, what they should be thinking about when they're planning their own supply chains. And that kind of brings me up to the calendar for the Global Electronics Association, what you've got coming up in the next months. You you mentioned that the the next um Chips Act information will probably come out in May. Um, so kind of around that period, there's a lot happening. Tell me what else is going on for Global Electronics Association in the next few months.

Alison James, Senior Director Europe, Government Relations, Global Electronics Association 11:15

I mean, in the next few months, we're continuing. We are continuing to have meetings in the build-up to the European CHIPS Act and in response to a lot of these initiatives. So that goes on all of the time. As much as possible, we bring in companies so that we can enable and facilitate that dialogue between companies and the European institutions. So we've been doing that over the last couple of months also in meetings with cabinets and meetings with the European Commission. We we will um organize a meeting before the summer also, once the European Chips Act has come out, so that we can take the proposal and continue the discussion on what's needed for all of the critical industries. So there will be some more meetings between now and the summer. Quite a busy period.

Philip Stoten, Journalist and Podcast Host 11:55

Yeah, and it's great to educate the uh the market on those instruments that you've already mentioned today for the automobile industry, for the defense industry, for um whichever whichever sector they're operating. Allison, thanks so much for your time. Always a pleasure to chat. Look forward to the next time we meet face to face, and uh we'll talk again soon. Thank you.

Alison James, Senior Director Europe, Government Relations, Global Electronics Association 12:16

Thank you, Tom.