Europe’s AI buildout depends on foreign suppliers

Europe is one of the world’s largest markets for AI datacenter infrastructure, but EU-headquartered companies hold only six percent of the bloc’s datacenter semiconductor market, seven percent of server manufacturing and assembly, and eight percent of cloud infrastructure, according to the Global Electronics Association.

The group says Europe’s Cloud and AI Development Act aims to at least triple datacenter capacity within five to seven years, creating demand that could benefit mostly foreign suppliers unless industrial policy changes. Taiwan dominates contract chip manufacturing, South Korean and US suppliers lead memory, and US companies dominate much of the server, networking, storage, and cloud infrastructure stack.

GEA recommends an end-to-end EU strategy that uses local demand to attract private investment and encourage global technology and manufacturing companies to expand production in Europe. It argues that servers have become the main growth driver for electronics since 2024 and are forecast to become the largest electronics segment by 2030, ahead of smartphones or automotive electronics.

The report says Chips Act 2.0 and CADA are positive steps, but European policy must also cover printed circuit boards, electronic manufacturing services, advanced packaging, and substrates. GEA acknowledges that Europe cannot build the full supply chain with EU-headquartered firms alone, but says more of the value chain should be anchored within the region.