The Global Electronics Association released the report "From Chips to Systems: Building an End-to-End EU Strategy for Data Centre, Cloud Infrastructure and AI", produced jointly with DECISION Études & Conseil. The report examines Europe’s position as one of the world’s three largest markets for AI data centres while noting that most of the value created by that demand accrues to companies and supply chains outside the EU. It quantifies the gap layer by layer and presents a policy roadmap to address it.
Sanjay Huprikar, Chief Global Officer of the Global Electronics Association, said: “EU-headquartered companies are earning six cents on every euro spent on data centre semiconductors in their own market, seven cents on server manufacturing and assembly, and eight cents on cloud infrastructure. Europe is building the most strategically important electronics vertical, but only capturing a small fraction of the value. Fixing this gap requires a bold, end-to-end strategy, one that connects chips to systems, demand to manufacturing, and European policy ambition to real industrial outcomes. That means scaling up European companies and leveraging the manufacturing know-how that global leaders bring to production facilities right here in Europe.”
Key data from the report include the following:
DECISION forecasts that servers will become the largest electronics segment before 2030, ahead of smartphones or automotive electronics, driven predominantly by demand for AI applications.
Since 2021, following the COVID-19 pandemic, EU demand for server systems has been growing at an annual rate of 36%, compared with 20% for domestic manufacturing of those systems.
EU-headquartered companies earn six cents of every euro spent on data centre semiconductors, seven cents of every euro spent on server manufacturing and assembly, and eight cents of every euro spent on cloud infrastructure in the European market.
Alison James, Senior Director for European Advocacy at the Association, said: “The European Commission’s Technological Sovereignty Package, anchored by the Chips Act 2.0 and the proposed Cloud and AI Development Act, can help rectify this imbalance by catalyzing investment in Europe by both European and international manufacturers.”
The report outlines the scale of the challenge and the economic opportunity if the EU transforms domestic demand for high-performance computing into EU-built physical infrastructure for data centre, cloud and AI systems.
