European photonics warns: dependence on overseas markets must be cut

28 Apr 2023

Photonics21 survey responses prompt call for European policy intervention.

A newly-published survey from the European technology platform Photonics21 and the European Photonics Industry Consortium (EPIC) reveals that in order to deal with serious supply chain problems, the “overwhelming majority of European photonics companies are calling for the intervention of policy makers”.

The report, published as European industry leaders gathered in Brussels, Belgium, for the Photonics Partnership Annual Meeting, stated, “The European photonics industry is facing serious supply chain issues that are the direct result of an overdependence on overseas markets.”

The survey found that over 80 percent of EU-based photonics companies are grappling with supply chain shortages. By their own admission, most of them will not be able to solve these supply chain issues by themselves and call upon national and European policy makers for help. The importance of photonics on EU strategic autonomy was exemplified during the state visit of French President Emmanuel Macron to The Netherlands and the resulting Franco-Dutch Pact for Innovation and Sustainable Growth.

The vulnerability of the European photonics supply chain may lead to serious knock-on impacts on all these key European industrial sectors. Policies such as the European Chips Act and the Critical Raw Materials Act show that the European Union aims at more strategic autonomy in existing and future emerging economic sectors.

Published on the Photonics21 website, the report associated with the survey, states, “The lack of sovereignty in the photonics industry is a major concern as businesses are heavily dependent on imports from non-EU-countries, above all from China. Of the survey participants, two thirds stated that critical goods such as microelectronic and photonic semiconductors, optical components and raw materials have a limited availability in Europe, with at least 10 percent being completely unavailable – jeopardizing photonics value creation in Europe.

“Respondents are eager to build reliable and viable supply chains within Europe. Ninety percent of participants say, given the option, they would commit to buying from European vendors even if this came at a higher price. The majority of all respondents also make it clear that, in their point of view, the supply chain issues cannot be resolved without the intervention of EU policy makers and national governments respectively.”

‘Defending Europe’s position’

Dr. Lutz Aschke, President of Photonics21 commented, “The European photonics industry is number two in the world. To make sure we maintain and defend this position, national and European policy makers need to prioritize this strategic sector.”

He continued, “We need to implement a European strategy on critical materials and components for key industries and technologies to secure a resilient photonics supply chain in Europe. Specifically, research and development activities, as well as the production of those photonic components in Europe that are critical in the industry supply chain should be strengthened. In the context of the chips industry, we have seen that it can become very expensive for all of us if we are not paying attention now.”

The survey on EU Photonics Supply Chains was prepared by Photonics21 and EPIC, analyzed with the help of Tematys and distributed with the support of national photonics associations across Europe. It was conducted from October 10 to December 20, 2022. Over 112 EU companies responded, with 80 percent being SMEs. The breakdown of the respondent business sectors reflects that of the photonics industry in Europe.