EU Chips Act
The European Chips Act, in force since 2023, allocates significant funding to expand semiconductor and electronics production capacity in Europe. While much of the headline funding goes to fab construction, a meaningful share supports the broader electronics ecosystem: PCBA, packaging, and connected-product manufacturing.
The funding is open to private companies investing in EU-based electronics capacity. Not free money, but co-investment terms can shift the economics significantly for new lines or capacity expansion.
IPCEI
Important Projects of Common European Interest (IPCEI) is a framework that lets EU member states co-fund strategic cross-border initiatives. There are active IPCEI projects in microelectronics and connected technologies. Buyers and manufacturers participating in IPCEI projects get funding, regulatory clarity, and supply-chain partner access.
Horizon Europe
Horizon Europe is the EU research and innovation program. For connected electronics, the practical relevance is funding for product R&D that includes a manufacturing component. Buyers who win Horizon Europe grants frequently look for EU manufacturing partners to round out the production-readiness side of their proposal.
What this means for connected-product teams
If you build connected products for the EU market and you are not yet manufacturing in Europe, the funding environment is the most favorable it has been in 20 years. Conversations that would have been unaffordable a few years ago are now realistic.
Practical opening: low to medium volume connected products (1000 to 50000 units per year per SKU) where lead-time, IP control, regulatory alignment, and supply-chain resilience matter as much as unit cost.
What this does not mean
The funding does not erase the unit cost gap with high-volume offshore manufacturing for consumer electronics. Mass-market consumer products will continue to flow primarily to large offshore lines.
The funding shifts the economics for the connected industrial, building automation, energy device, and access control segments where unit cost is one factor among several.
Sources
- European Commission, EU Chips Act
- European Commission, IPCEI on Microelectronics and Communication Technologies
- European Commission, Horizon Europe Work Programmes