European EMS Revenue Rose 12.3 Percent in Early 2026
The electronic manufacturing services sector recovered from 2025 lows, though supply chain bottlenecks persist.
Updated on Sept. 23, 2026 in Semiconductors
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European electronic manufacturing services (EMS) revenue grew 12.3% during the first half of 2026 compared to late 2025 levels. While order backlogs expanded by nearly 14%, industry conditions remain constrained by component availability.
Why it matters
The sector recovery is tempered by a mismatch between demand and available manufacturing capacity for mature nodes. This tightening supply chain is shifting regional performance, with specific backlogs in Central Eastern Europe growing significantly.
The current industry book-to-bill ratio sits at 1.21, signaling strong demand relative to output. However, component price inflation is rising as high-bandwidth memory demand for AI applications diverts wafer capacity away from automotive, analog, and power components.
The players
European EMS Industry
A network of electronic manufacturing service providers that assemble printed circuit boards and electronic systems for global automotive, industrial, and consumer markets.
The details
The EMS industry functions as the primary contractor for assembling complex electronics, relying on stable access to passive components, RF (radio frequency) parts, and analog semiconductors. Currently, capacity is strained because foundries are prioritizing high-bandwidth memory production for AI. This reallocation of wafer space creates a ripple effect where mature-node components—standard chips used in automotive and industrial systems—face shortages. Consequently, firms are passing bill-of-materials inflation directly to customers while navigating supply volatility.
Timeline
Late 2025: The industry cycle hit its low point.
H1 2026: Revenue increased 12.3% from the late 2025 levels.
Full Year 2026: Nearly 70% of German companies forecast growth for the year.
2027: Projected industry revenue growth of 8.6%.
The Tech Race
The current European recovery aligns with broader cyclical trends in the semiconductor market following the late 2025 sector low. While the industry is attempting to normalize operations, it remains constrained by the global competition for wafer capacity between legacy electronics and AI hardware.
Professional buyers in the automotive and industrial sectors should anticipate continued price volatility for mature-node components due to ongoing supply shortages. The current 1.21 book-to-bill ratio suggests that lead times for order fulfillment remain extended across the region.
The takeaway
The sector shows a clear post-2025 rebound, but regional performance remains highly fragmented based on local backlog growth. Investors and procurement teams should monitor the full-year 2026 results from German companies as a bellwether for European output capacity.
Further reading
For more on the current state of component manufacturing and supply trends, visit the Semiconductors section.
Source note: This article includes information reported by EMSNow.
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