Market evolution: Diodes (CN 854110) — 2015–2025

Introduction

This report examines the evolution of EU trade in diodes (excluding photosensitive or light-emitting diodes) under customs code 854110 over the period 2015–2025. These semiconductor components are fundamental building blocks of modern electronics, used across power management, signal processing, and protection circuits in virtually every sector from automotive to telecommunications. The EU, as a major consumer but limited producer of such components, has experienced significant structural shifts in this market over the decade—shaped by rising prices, geographic reorientation of supply chains, and growing external dependency. The analysis draws on EU-level trade data to identify the main dynamics affecting the bloc's import and export flows, supply concentration, and strategic vulnerability. Full data is available on the Trade Dashboard.

A Rising Trade Deficit Driven by Price, Not Volume

The EU's trade in diodes over 2015–2025 tells a striking story: while the value of both imports and exports grew substantially, the volumes traded actually contracted. This divergence points to a market undergoing fundamental price transformation rather than simple demand expansion.

The trade deficit has more than doubled in value terms

The EU's trade balance in diodes deteriorated markedly over the period, moving from a deficit of €180 million in 2015 to €407 million in 2025—a 125.9% widening. At its worst point, the deficit reached approximately €565 million, illustrating the scale of structural dependency that emerged during the early 2020s.

Import growth (+63.8%) significantly outpaced export growth (+43.6%), reflecting both the EU's growing appetite for these components and a structural disadvantage in production capacity.

Volumes declined even as values surged

A critical observation is that the quantities actually traded moved in the opposite direction to values. Import volumes fell 20.3% (from 5,530 to 4,408 tonnes), while export volumes fell 13.3% (from 2,055 to 1,782 tonnes). This means the entire increase in trade value was driven by rising unit prices—export prices rose 65.8% (from €268,191 to €444,725 per tonne) and import prices more than doubled, surging 105.5% (from €132,491 to €272,265 per tonne).

This price dynamic is consistent with the global semiconductor price inflation observed post-2020, driven by supply constraints, pandemic-related disruptions, and increased demand from automotive and industrial sectors. Notably, the EU's import prices rose faster than its export prices, suggesting that EU-based assemblers or resellers absorbed higher input costs that were not fully passed through to their customers.

European production has shifted from volume to value

The EU's own production data corroborates this structural shift. Production quantities fell 27% (from 13.6 billion to 9.9 billion units), yet production value rose 50% (from €514 million to €771 million). This implies that EU producers have moved up the value chain—manufacturing fewer but more specialized or higher-specification diodes rather than competing on volume with Asian suppliers.

Geographic Reorientation: Asia's Growing Grip and the UK's Fading Role

The geographic composition of the EU's diode trade underwent dramatic change over the decade. The most notable developments are the consolidation of Asian suppliers—particularly China and Southeast Asia—and the sharp decline of the United Kingdom as both a trade partner and a gateway for goods.

China has consolidated its position as the dominant supplier

China's share of EU diode imports grew from €338 million in 2015 to €659 million in 2025, a 95.2% increase. At its peak, Chinese imports reached €841 million. China is also the EU's largest export destination, with flows rising 71.5% to €271 million—meaning the EU both sources from and sells to China in significant volumes, likely reflecting intra-firm trade and re-export dynamics within multinational electronics supply chains.

Southeast Asian suppliers have surged

Beyond China, the most striking growth came from Malaysia, where EU imports grew 208.2%—from €60 million to €185 million. Thailand (+94.2%) and the Philippines (+57.9%) also recorded strong growth. This pattern reflects the broader trend of semiconductor assembly and test operations migrating from China to Southeast Asia, partly driven by geopolitical risk diversification and cost optimization by major manufacturers such as Infineon, which has substantial operations in Malaysia.

The United Kingdom has sharply receded as a trade partner

The UK's decline is one of the most dramatic shifts in the dataset. EU imports from the UK fell 70.7% (from €56 million to €16.5 million), and exports to the UK dropped 21.1%. The UK import figure is also characterized by extreme price volatility, with a coefficient of variation of 1.34—far higher than any other major partner. A major price shock was detected in 2021, with UK import prices surging 937.1%. This is likely connected to post-Brexit customs disruption and reclassification effects rather than a genuine market shift, but the long-term trend suggests a real decline in the UK's role as a supply conduit for the EU.

Germany dominates both import and export flows within the EU

Among EU Member States, Germany is the clear leader on both sides of the ledger. German imports rose 64% to €743 million, and exports surged 102.7% to €476 million. Germany holds the highest revealed comparative advantage (RCA = 2.77) and the strongest export specialization among EU members, consistent with the presence of major diode manufacturers like Infineon Technologies and the country's strong automotive electronics sector.

Hungary, the Netherlands, Austria, and France also feature prominently, though with divergent trajectories—Hungary's imports grew 342.9% (reflecting the expansion of electronics assembly operations), while France's imports declined 38.2%.

Growing Concentration and Strategic Vulnerability

The final decade-long story is one of increasing market concentration and deepening EU vulnerability in a component category that is critical to industrial competitiveness and the green/digital transitions.

Import supply has become significantly more concentrated

The Herfindahl-Hirschman Index (HHI) for imports rose 38.3%—from 2,425 to 3,353 by value, and 49.4% by volume (from 2,228 to 3,329). An HHI above 2,500 is generally considered to indicate a highly concentrated market, and the EU has now firmly crossed that threshold. By contrast, export concentration remains more moderate (HHI rising from 1,403 to 1,661), reflecting the EU's more diversified customer base.

This rising concentration reflects China's growing dominance and the consolidation of Southeast Asian supply, making the EU more exposed to disruption from any single source.

Net import reliance has doubled

The EU's net import reliance moved from 14.3% in 2015 to 29.9% in 2025, a 108.5% increase, peaking at 42.1% at one point. This metric, which measures the share of apparent consumption met by net imports, confirms that the EU's domestic production has not kept pace with demand growth.

Meanwhile, trade intensity (the ratio of total trade to production) reached 100.1%, and export propensity (exports as a share of production) also reached 100.4%. These figures indicate that the EU's diode sector is now almost entirely trade-oriented, with domestic production largely channeled to exports while imports fill domestic consumption needs. This is the hallmark of a sector deeply embedded in global value chains—efficient in normal times, but exposed in periods of disruption.

Conclusion

Over the 2015–2025 period, the EU's trade in diodes (CN 854110) has been shaped by three intersecting dynamics: a shift from volume to price-driven trade, a geographic reorientation toward Asia, and a marked increase in strategic vulnerability. The trade deficit has more than doubled, driven entirely by price inflation rather than volume growth. Supply has concentrated around China and an emerging Southeast Asian corridor (notably Malaysia), while the UK has faded as a partner. Import concentration, as measured by the HHI, now sits firmly in "highly concentrated" territory, and net import reliance has doubled to nearly 30%.

These trends place diodes squarely within the broader concerns animating EU industrial policy—from the European Chips Act to strategic autonomy debates. While EU producers have demonstrated resilience by moving up the value ladder (producing fewer units but at higher value), the bloc's dependence on external suppliers for this foundational component continues to deepen. The data suggests that any disruption to Asian supply chains—whether geopolitical, logistical, or related to competing demand from the electric vehicle and AI sectors—would have material consequences for European industry.