Business Location Europe: How Distribution Responds to Geopolitical Upheavals

FBDi Industry Review Business Location Europe: How Distribution Responds to Geopolitical Upheavals

2025-12-10 From Margit Kuther | Translated by AI 2 min Reading Time

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Geopolitical tensions, energy issues, and raw material dependencies are weighing on European industry. The Association of Component Distribution examines how these developments impact Europe as a business location—and why electronics distribution plays a key role in technological sovereignty and resilience.

Business location Europe: Distribution is a stabilizing force for the electronics industry.(Image: Günterr / Pixabay) — Business location Europe: Distribution is a stabilizing force for the electronics industry.
(Image: Günterr / Pixabay)

The geopolitical framework conditions are shaping electronics distribution more than ever—ranging from U.S. tariff policies to the economic conflict over Nexperia. Members of the Association of Component Distribution (FBDi) have long observed that the economy is massively influenced by political decisions and global disruptions.

In a survey conducted by the industry association, members explain their viewpoints: from growth opportunities in key sectors to the role of various customer groups and strategies for stable supply chains. A shared realization among all respondents is that the industry faces a complex mix of opportunities and risks. While new markets are enticing, uncertainties and price pressures continue to dominate daily operations.

Growth Drivers Are Digitization, AI, And Sustainable Technologies

Distributors primarily expect growth in medical technology, energy, industrial automation, and automotive sectors. Digitization, artificial intelligence, and sustainable technologies are considered key drivers. At the same time, the market situation remains challenging: Many distributors anticipate a phase of stabilization before a sustainable revival takes hold.

Among customer groups, start-ups and SMEs dominate as innovation drivers, while OEMs ensure stable volumes. Key success factors for distribution include technical consulting, design-in expertise, and efficient supply chain solutions.

The respondents have varied assessments of location and supply chain policies. A growing segment is focusing on more regional value creation and expanding European structures to mitigate risks and reduce dependencies. At the same time, sustained cost pressures are forcing many companies to maintain international procurement routes. Rather than a complete shift away from global networks, a pragmatic middle ground is emerging—with greater diversification and targeted nearshoring for sensitive product areas.

Distribution is More Than Delivery

"The survey vividly demonstrates the wide-ranging opportunities for distribution—from MedTech to energy to aerospace. At the same time, the industry must continue to manage price and supply chain risks while actively shaping change. The voices of our members emphasize: distribution is more than delivery—it is a driver of innovation, a bridge builder, and a stability anchor for the electronics industry in Europe," emphasizes Andreas Falke, Managing Director of the FBDi Association.

The detailed statements of the participating member companies are available on the FBDi website. (mk)

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Date: 08.12.2025

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