Market evolution: Integrated circuit parts (CN 854290) — 2015–2025

Introduction

This report examines the trade dynamics of CN 854290 — Parts of electronic integrated circuits, n.e.s. — as traded between the European Union and the rest of the world over the period 2015–2025. This product category covers components and sub-assemblies used in semiconductor manufacturing and packaging, a segment strategically situated within the broader electronics value chain. Over the eleven-year window, the EU's trade profile for this product underwent significant structural shifts: a historically positive trade surplus eroded substantially, the geographic composition of both imports and exports was reshaped, and EU domestic production surged even as trade openness indicators declined. This report dissects these three dynamics in turn, drawing on the overall trade data, partner-level breakdowns, and vulnerability indicators.

1. The Eroding Trade Surplus: Export Decline Meets Import Price Inflation

The EU's trade balance for CN 854290 deteriorated markedly over the period. While the EU remained a net exporter throughout, its surplus shrank by more than half, driven by a combination of falling export volumes and sharply rising import unit values.

1.1 Export values and volumes fell while the import bill grew

Between the first and last year of the data window, EU exports of integrated circuit parts fell from €330 million to €276 million (−16.5%), while export volumes dropped from 4,194 tonnes to 3,376 tonnes (−19.5%). Over the same span, import values rose from €197 million to €213 million (+8.3%), even though import volumes contracted sharply from 1,236 tonnes to 747 tonnes (−39.5%). The implication is clear: the EU was importing fewer physical units but paying substantially more for them.

Source: General Overview

1.2 The unit price gap between imports and exports widened dramatically

A striking feature of this period is the divergence in unit values. Import unit prices rose by 79.0% (from €159,217/t to €285,008/t), while export unit prices rose by only 3.7% (from €78,664/t to €81,549/t). By 2025, the average import was 3.5 times more expensive per tonne than the average export. This suggests that the EU increasingly specialised in exporting lower-value-added parts while importing higher-value-added or more technologically advanced components — a pattern consistent with upstream/downstream specialisation within the semiconductor supply chain.

1.3 Price shocks amplified the structural trend

The period was punctuated by significant price shocks that accelerated the erosion of the trade balance. The most notable occurred in 2021 on the import side:

• United Kingdom (imports, 2021): A price shock with an abnormality score of 192.5 and a year-on-year shift of +381.3%, accounting for 21.2% of import value that year. This coincided with the post-Brexit adjustment period and the global semiconductor shortage.
• Norway (imports, 2021): A price shock with an abnormality of 34.8 and a shift of +672.6%, though representing a smaller 1.6% share of import value.
• United States (exports, 2022): An export price shock with an abnormality of 31.8 and a shift of +113.8%, covering 14.0% of export value.

Source: Supply shocks

These events, set against the backdrop of the 2020–2022 global chip crisis, contributed to the price inflation visible in the aggregate import figures.

2. Geographic Reconfiguration of Trade Flows

The geographic structure of EU trade in CN 854290 underwent substantial reshaping. Traditional partners saw declining roles on the import side, while new or previously minor partners gained prominence on the export side. The overall effect was a diversification of export markets and a slight concentration of import sources.

2.1 The United Kingdom's role in EU imports collapsed, while China's grew

Among the top seven import partners, the most dramatic shift was the decline of the United Kingdom, whose exports to the EU fell from €32 million to €10 million (−69.6%). This is consistent with post-Brexit trade friction and the re-routing of supply chains. Meanwhile, China's exports of parts to the EU nearly tripled, rising from €12 million to €37 million (+197.6%), though from a relatively low base and still subject to significant volatility (coefficient of variation of 0.30). Japan remained the largest single supplier, with relatively stable flows (€30–32 million range, +8.7% over the period).

Source: Partners

The import-side Herfindahl–Hirschman Index (HHI) by value rose modestly from 1,040 to 1,265 (+21.6%), indicating a mild increase in concentration. By volume, the shift was more pronounced, with the HHI climbing from 1,183 to 2,177 (+84.0%), suggesting that physical import flows became notably more concentrated among fewer origins.

2.2 Tunisia remained the dominant export destination but lost share, while Serbia and the UK surged

Tunisia, long the EU's primary export market for these parts (likely reflecting offshored assembly operations, e.g., STMicroelectronics' facilities), saw its share decline from €194 million to €121 million (−37.7%). This is the single largest factor in the overall export decline. The decline may reflect increased localisation of supply chains in Tunisia, shifting sourcing patterns, or competition from Asian suppliers.

Meanwhile, several smaller markets grew rapidly:

• Serbia surged from €3.0 million to €18.5 million (+509.9%), though with very high volatility (CV of 1.31), consistent with investment-driven, lumpy trade flows — likely tied to semiconductor-related FDI in the Western Balkans.
• United Kingdom grew from €8.8 million to €22.6 million (+156.8%), potentially reflecting re-routing of supply chains post-Brexit.
• Aruba and Sint Maarten showed extreme percentage growth (from low bases), suggesting re-export or transshipment dynamics.

Source: Partners

The export-side HHI by value fell from 3,605 to 2,227 (−38.2%), confirming a meaningful diversification of export destinations away from the historical dominance of Tunisia.

2.3 Within the EU, France's export dominance waned as Italy and Ireland grew

The internal EU picture was also reshaped. France, which accounted for the lion's share of EU extra-EU exports (€211 million in 2015), saw its contribution fall to €121 million (−42.5%). Germany remained relatively stable (€46–53 million range). Italy more than doubled its contribution (from €11 million to €29 million, +161.6%), and Ireland grew from €2.2 million to €10.5 million (+375.0%), reflecting the expansion of semiconductor-related operations there.

On the import side, Germany and Italy saw increases (+24.7% and +113.9% respectively), while France (−38.9%), Portugal (−88.4%), and Belgium (−72.4%) saw sharp declines. Malta — home to significant semiconductor packaging and testing operations — maintained substantial import volumes (€10–30 million range), growing by 41.8%.

Source: Reporters

3. Domestic Production Growth Amid Declining Trade Openness

Perhaps the most significant structural story is the simultaneous surge in EU domestic production and the decline in trade intensity and export propensity. The EU appears to be producing substantially more integrated circuit parts but engaging less with international markets in proportional terms.

3.1 EU production value more than doubled over the period

EU production of CN 854290 (proxied by PRODCOM code 26.11.40.90 — Parts of integrated circuits and microassemblies) grew from €826 million to €2,014 million (+143.9%), with a peak of €2,323 million along the way. This is a remarkable expansion, likely driven by the European Chips Act commitments, reshoring incentives, and expanded capacity at existing facilities.

Source: Production volumes

3.2 Trade intensity and export propensity declined steeply

Despite the expansion in production, the EU's trade engagement with the rest of the world in this product contracted significantly:

Source: Trade intensity, Export propensity, Net import reliance

Trade intensity — the ratio of imports plus exports to production — fell from 36.0% to 20.3%, meaning that international trade is now a smaller share of the EU's total market for these parts. Export propensity — the share of domestic output that is exported — nearly halved, from 22.1% to 11.7%. Net import reliance remained negative throughout (i.e., the EU was consistently a net exporter), deepening slightly from −0.57% to −0.89%. This pattern is consistent with rising domestic absorption: the EU is producing more, exporting a smaller fraction of it, and substituting some imports with domestic output.

3.3 Specialisation remained concentrated in a handful of member states

In 2025, the most specialised EU member states in CN 854290 (by Revealed Symmetric Comparative Advantage, RSCA) were Denmark (RSCA 0.80, RCA 8.98), Portugal (RSCA 0.61, RCA 4.11), Czechia (RSCA 0.40, RCA 2.33), Slovakia (RSCA 0.26, RCA 1.69), and Italy (RSCA 0.19, RCA 1.45). These five countries accounted for the bulk of the EU's competitive advantage in integrated circuit parts. At the other end, Cyprus, Slovenia, Ireland, Croatia, and Estonia showed near-zero specialisation, despite Ireland's growing export volumes.

Source: Specialisation

Conclusion

Over 2015–2025, the EU's trade in parts of electronic integrated circuits (CN 854290) underwent a threefold transformation. First, the historically comfortable trade surplus eroded by more than half, as export volumes declined and import unit prices surged — pointing to a shift in the EU's position within the value chain, with growing reliance on higher-value imported components. Second, the geographic map of trade was redrawn: China nearly tripled its exports to the EU, the UK's import role collapsed post-Brexit, Tunisia lost ground as the EU's primary export destination, and new markets like Serbia emerged. Third, and most consequentially, EU domestic production more than doubled to over €2 billion, even as trade intensity and export propensity fell sharply — a sign that the EU is increasingly absorbing its own output, likely driven by strategic policy initiatives to build semiconductor self-sufficiency. Whether this inward turn translates into genuine technological autonomy or merely reflects changing cost structures will be a key question for the coming years.