Inside APEX – EMS Recalibrated

How Geopolitics is Driving the Regionalization of Electronics Manufacturing

By Philip Stoten and Eric Miscoll, based on our conversations at APEX 2025

In the halls of APEX 2025 in Anaheim, California, electronics manufacturing executives from around the world gathered to discuss their industry’s future. We were lucky enough to sit down with many of them and get their views of what is challenging and changing this unique and critical industry. While technology advancements and automation dominated many conversations, and we’ll come back to that in another feature, a more profound transformation is reshaping the industry’s geographical footprint: the regionalization of electronics manufacturing.

The Pendulum Swings

For decades, the electronics manufacturing industry followed a globalization playbook—consolidating production in low-cost regions, primarily in Asia, with China as the epicenter. The formula was simple: leverage economies of scale and lower labor costs to manufacture products that would be shipped worldwide.

But as executives at APEX 2025 made clear, the pendulum is now swinging back toward regionalized manufacturing approaches, and it has been for some time thanks to disruption to the supply chain, the pandemic, and of course, current trade tensions.

“We are in a business park so we operate under a shelter agreement there,” explains Andrew Williams, CEO of Libra Industries, discussing their operations in Guaymas, Mexico. “We’re the only traditional contract manufacturer in the park proper. That area is interesting for Mexico. It’s all aerospace, and medical type products.” This targeted approach to manufacturing location—choosing sites based on end markets, technological capabilities, and geopolitical stability rather than merely labor costs—represents the new playbook for electronics manufacturing.

Tariffs, Trade Wars, and Presidential Policies

The immediate catalyst for this shift? The unpredictable nature of international trade relationships and tariff policies.

“The world is an interesting place currently, for sure,” notes Otto Pukk, President & CEO of InCap. “The markets are a little bit turbulent and perhaps a little bit hesitant currently with all the new tariffs. The new administration here in the US is perhaps putting tariffs on things and perhaps not.”

This uncertainty is creating what Andrew Williams of Libra Industries describes as “a lot of non-value-add activity” as companies scramble to understand the implications of rapidly changing trade policies. “You wake up one day and you’ve got a tariff on a certain product at a certain rate and that afternoon it’s doubled and by the evening it’s gone away.”

Thomas Michels, CEO of ILFA, a European PCB manufacturer, sees this uncertainty as potentially beneficial for European manufacturing: “Trump, for us, is good because he opened the eyes of everybody that Europe has to stand on their own feet instead of always looking at the big brother.”

The Rise of India: A New Manufacturing Powerhouse

As companies seek to diversify their manufacturing footprints away from China-centric strategies, India has emerged as perhaps the most significant beneficiary.

“For the last five years the Indian EMS industry has been growing at about 41% year-on-year,” explains Vivek Khanna, MD of Indic EMS. “I expect the same growth or not less than 35% for the next five years.”

The drivers behind India’s rise include demographic advantages, government support, and its geopolitical positioning. As Khanna notes: “We have a very, very good talent pool when it comes to engineering. Geopolitically, it’s on the right track.”

This talent advantage cannot be overstated. While manufacturers in Europe, North America, and even parts of Asia struggle with workforce shortages, India offers a sustainable pipeline of skilled and well-educated workers. “More than 60-65% of the population is in the age group of 25 to 45,” Khanna points out.

The Strategic Manufacturing Portfolio

Rather than abandoning globalization entirely, leading electronics manufacturers are adopting what might be called a “strategic manufacturing portfolio” approach—maintaining multiple manufacturing locations to serve different purposes and mitigate various risks.

InCap’s strategy exemplifies this approach. With operations in the US, Europe, and Asia, the company has created an intentionally diverse manufacturing footprint. “We have gone, of course, where there’s good markets, but also InCap’s decentralized model is a strength in this kind of crisis,” explains Otto Pukk.

This model allows for rapid adaptation to changing conditions. As Dave Spehar, Managing Director of InCap’s US operation, explains: “The key, I think, is making sure you’re clear on your strategy and then, when you’re communicating your strategy, that you’re hitting key points of each of those elements.”

Automation: The Great Equalizer

A critical enabler of this regionalization trend is automation technology, which helps address the labor cost differentials that originally drove manufacturing globalization.

“Anything we could do to automate takes cost out and it improves quality as well,” notes Andrew Williams of Libra Industries. This sentiment was echoed by Patrick Stimpert of Matric Group, who emphasized the need to “automate everything” that involves repetitive tasks.

For companies like Microboard, a Connecticut-based EMS, automation represents a solution to demographic challenges: “As we know, we’re an aging population. We’re trying to hang on to our retirees. We’re not getting enough entrants into this industry,” explains CEO Nicole Russo.

Defense and Critical Industries Leading the Charge

The regionalization trend is particularly pronounced in defense and other strategically important industries where supply chain security transcends cost considerations.

Thomas Michels of ILFA notes a significant shift in European defense procurement policies: “Just today or yesterday, we have agreed on a budget of almost $1 trillion, 50% for defense and 50% for infrastructure.”

More importantly, there’s a growing recognition that defense supply chains need to be regionalized. “Politicians now understand that they have to make some rules on how the money has to be spent. Just to give you a number out of the European defense budget so far, 78% of the spendings is outside of Europe, and this is crazy,” Michels emphasizes.

Looking Forward: Balanced Regionalization

As the electronics manufacturing industry navigates this transition, what’s emerging isn’t a complete reversal of globalization but rather a more nuanced, balanced approach to regionalization.

“Doing nothing is worse than doing something,” advises Patrick Stimpert of Matric Group regarding trade policy uncertainty. “If you don’t have your business and it’s not profitable two years from now, you did that to yourself.”

This proactive approach might include:

Building manufacturing presence in multiple key regions
Developing strong local supply chains in each region
Leveraging automation to equalize labor cost differentials
Creating standardized processes, and even standardized equipment sets, that can be implemented globally
Maintaining cultural sensitivity to local workforce needs

Sean Niell of Vexos summarizes the essential elements for success in this new paradigm: “Standardization—the more you can standardize across platforms is good. But it really often comes down to communication. It comes down to communication between our salespeople, our operations and the customer.”

Conclusion: The Resilient Supply Chain

The recalibration of electronics manufacturing isn’t about abandoning global supply chains entirely. Rather, it’s about creating resilient, adaptable manufacturing ecosystems that can withstand geopolitical shocks, and other shocks for that matter, while still delivering value.

As Xaver Feiner of Zollner concludes: “Every direction is actually in play.” The companies that will thrive in this new era will be those that can maintain the benefits of global scale while building the regional capabilities that geopolitical realities now demand.

For the electronics manufacturing industry, the goal isn’t simply to react to today’s geopolitical tensions but to build a more sustainable, resilient model that can adapt to whatever challenges—and opportunities—tomorrow brings.

Industry Leaders Quoted in This Article – watch the full interviews on the SCOOP YouTube channel