Printed Circuit Board Factory Fire in France Sparks Concerns for European Critical Industries


In August, 23 years of my life went up in flames. Social unrest in Toulouse led to a fire that devastated my professional home, the Sud Ouest factory of CSI, one of the most reliable printed circuit board (PCB) manufacturers for Europe’s critical and aerospace industries. We are rebuilding and expect to have our facility producing boards again in 18 months. The fire that hit our facility exposes a far more fundamental challenge: alarming industrial vulnerabilities arising from the decline in Europe’s electronics manufacturing base.  

Mitigating risk to the European supply chain for critical electronics.  

CSI Sud Ouest is a small yet critically important part of the supply chain of France’s aeronautic and space electronics industry. The Toulouse fire threatened to bring parts of this supply chain to a standstill because the declining number of European PCB companies cannot easily meet regional demand when major supply chain disruptions occur. This is especially the case in industries, like aeronautic and space, where qualification is necessary before production can occur.  

I feared that CSI would not be able to satisfy its customer orders, but remarkably, our competitors—other PCB manufacturers in Europe—stepped in to help, offering to take on production for our clients while we rebuild over the next 18 months. Why did they do this? Because companies in beleaguered industries tend to build community and look out for one another. That is certainly true for the PCB industry. We share ideas, discuss challenges, and support one another through tough times. We all understand that losing work to offshore competitors in critically important sectors exacerbates the longstanding and significant migration of electronics manufacturing to Asia.  

Global electronics industry grows as Europe’s electronics manufacturing shrinks. 

PCBs are a critical building block in all electronics. They provide electronic interconnection among chips and other components to create functionality. The global demand for PCBs has exploded over the last 25 years because electronics have proliferated into just about every aspect of our lives. Yet, amidst global excitement for the sector, the reality for the European electronics manufacturing industry is sobering: fabrication of PCB and other electronics in Europe will significantly shrink as a share of global production between now and 2035. 

Let’s put Europe’s decline in context with real numbers. When I launched my career in the PCB industry as a young man, Europe accounted for more than 20% of global PCB production. Today, Europe accounts for just 2%. Over the past 15 years alone more than 140 companies ceased manufacturing PCBs in Europe. This dramatic decline in market share means that Europe can’t meet its own PCB needs much less serve foreign markets. More than 82% of demand is being met by China and other countries in Asia upon which Europe is now reliant.   

The future for European PCB fabrication is equally bleak. In June, IPC, the global electronics association,  published a paper that looked at the eight most critically important sectors to European innovation, security and well-being, and economic competitiveness: aerospace and defence, automation, healthcare, mobility, renewable energy, security, and servers. Within these eight sectors, Europe’s share of global production is expected to drop from 2.9% in 2023 to 1.7% in 2035. This downward trajectory is already being felt. Just this year, several additional European PCB facilities are closing including facilities of notable companies like Würth Elektronik CBT and Brandner PCB. In closing their doors, companies are laying off skilled workers, exacerbating the loss of know-how that will be critical to any revitalization of the industry. 

In this thin-margin business, the decline in market share has constrained the ability of companies to reinvest in themselves by expanding and modernizing their facilities, buying new equipment, and upskilling their employees. As a consequence, Europe is falling behind its global competitors not only in capacity but in capabilities as well. As an example, very few European companies can fabricate sophisticated ultra high-density interconnect (uHDI) PCBs, and yet critical technologies for strategic projects are increasingly required. 

While the situation facing European PCB fabrication is especially dire, other segments of electronics risk losing market share as well, including the electronics assembly, semiconductor assembly and test, and IC substrate industries. In the earlier referenced IPC paper examining eight strategic sectors, the overall share of electronics systems manufactured in Europe is projected to decline, falling from 16.7% in 2023 to 15% in 2035. These electronics systems are in everything from agricultural and industrial equipment to airplanes, satellites, and medical technologies. In other words, we need to think more holistically about the ecosystem that supports electronics manufacturing and the importance of this ecosystem across all manufacturing industries.   

Why rebuild? We commit to Europe’s industrial future despite the harsh reality. 

The plight of European electronics manufacturing weighs on me. Rebuilding the CSI Sud Ouest factory after the fire is a gamble that comes with significant financial risk. Put simply, operating a manufacturing business in Europe requires courage. Our costs are higher, from wages to environmental compliance, and our labour laws are more stringent than many of our global peers. Yet walking away is not an option. Closing our doors permanently would mean more jobs lost and, importantly, harm to our customers in Europe’s strategic industry during a time of rising geopolitical tensions. 

In an era of globalization, the proximity to our customers is still incredibly important. Location is about more than just convenience –  this gives us a significant advantage. We can collaborate closely on specific design needs, leveraging our extensive experience and technical expertise. This partnership between designer and manufacturer is essential and make no mistake: if Europe loses its PCB industry, it will not come back. The loss will be reflected in a downward trajectory in EU economic competitiveness, innovation leadership, and national security. 

So what now? 

If Europe is to maintain its position as a leader in global technology and secure its defence industrial base, we must prioritize policies that encourage investment in our sector. As outlined in the European electronics manufacturing ecosystem’s call-to-action, this will require establishing an Electronics Manufacturing Strategy as part of a New Competitiveness Deal, creating a Strategic Electronics Manufacturing Act (SEMA), levelling the playing field through the regulatory and tax environment and collaborating for a future-proof skilled workforce. Above all, we need to work together to grow European capacity and support a sector that is foundational to our technological and strategic independence. We cannot afford to let this vital sector weaken. 

The fire at CSI is a wake-up call. It forces us to recognize the interconnectedness of our industrial capabilities and national security and asks for a recommitment to strengthening the foundations of European electronics manufacturing. As the new European Commission begins its work in Brussels on the Competitiveness Compass we reiterate this urgency. Only through concerted action, we can secure not just the future of our industries but also the safety and prosperity of Europe as a whole. 

The time for action is now before it’s too late. 

Eric De Ponthaud is the Chief Executive Officer of CSI Sud Ouest.





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