The Electronics and Semiconductors sector stands out as a landscape of rapid transformation, heightened complexity, and significant opportunity. To help senior-level leaders who consider their career options in this space, Zach Fountain, Sector Lead for Electronics and Semiconductors at Pacific International Executive Search, offers a timely perspective on how the market is evolving and what it means for leadership careers. Drawing on his work with clients and candidates across Europe and globally, he explores current sector performance, the structural challenges shaping 2026, his outlook for the months ahead, and the strategic moves executives should consider to stay ahead in an increasingly competitive talent market.
The first half of 2026 looks broadly positive for the global semiconductor and electronics ecosystem, with strong demand driven by AI, data centres, and industrial automation. Still, the recovery in Europe remains uneven and highly sector-specific. This creates attractive growth and hiring pockets in Europe’s electronics and semicon value chain, while also intensifying the competition for senior, strategically critical talent from April onwards.
Key Developments/Challenges
The global semiconductor market is forecast to grow by more than 25% in 2026 to around USD 975 billion, led by Logic and Memory chips growing at over 30% year-on-year, underscoring how quickly AI, cloud, and data-centre workloads are scaling. While the Americas and Asia-Pacific remain the fastest-growing regions, Europe is still expected to post low double-digit growth, meaning European suppliers must compete harder on speed, specialisation, and resilience rather than volume.
Within Europe, demand is increasingly driven by three capital-intensive themes: the rapid expansion of hyperscale and AI data centres, renewed commitment to nuclear and other baseload power projects, and structurally higher defence spending. Electricity demand from European data centres alone could triple by 2030, and the EU’s InvestAI and SMR (small modular reactor) initiatives are catalysing investment in high-reliability power electronics, control systems, sensors, and advanced semiconductors.
At the same time, Europe’s traditional volume anchor market, automotive, is still working through an uneven transition from internal combustion to EVs and software-defined vehicles, which has depressed some legacy discrete and power components even as demand for high-value automotive electronics rises. This divergence is pushing many European EMS and component manufacturers to pivot away from low-margin, cyclical automotive work and towards higher-margin, engineered-to-order electronics for defence, medical, industrial automation, and energy infrastructure.
These shifts create several execution challenges: sustained CAPEX is needed to localise more of the supply chain in Europe, yet many mid-sized firms still rely heavily on Asian factories and sub-suppliers, exposing them to geopolitical and logistics risks. In addition, escalating energy prices, tightening sustainability regulations and ongoing skills shortages in high-end engineering and operations mean that even companies riding the demand wave must operate with far greater capital and talent discipline than in previous cycles.
Trends
Electronics manufacturing services (EMS) in Europe are expected to grow steadily as OEMs outsource more complex design, prototyping and production to partners with Industry 4.0 capabilities. Growth is robust in segments that require tight integration of hardware, embedded software and connectivity, such as industrial IoT, medical devices and advanced automation, where EMS providers can offer end-to-end design and engineering services, not just assembly.
Across the electronics and semicon ecosystem, automation and “smart factory” technologies are being adopted at pace, from robotics and advanced analytics on the shop floor to predictive maintenance and digital twins for critical equipment. This underscores the need for leaders who can translate operational excellence and lean backgrounds into data-driven decision-making, and who can manage transformations that blend OT, IT and AI rather than purely mechanical or electrical upgrades.
On the talent side, companies are becoming more intentional about workforce upskilling in AI and advanced data tools, moving from ad hoc experimentation to structured, role-specific capability building. In practice, this means setting clearer standards for how engineers, product managers, and commercial leaders use AI for design simulation, failure analysis, pricing, and customer engagement, and integrating these tools into daily workflows rather than treating them as side projects.
The geopolitical push for supply‑chain resilience and “friend‑shoring” is another powerful trend affecting European players. Incentives under the EU Chips Act and national programmes are encouraging greater front-end and back-end capacity in Europe, but they are also attracting aggressive global competitors and new entrants, which raise the bar on employer branding, leadership calibre, and speed of execution in European fabs and advanced packaging facilities.
Predictions
Given the current order books and market forecasts, many semiconductor and electronics firms are on track for a strong 2025–26 financial year, particularly those exposed to AI infrastructure, industrial automation and defence electronics. However, margin performance will increasingly differentiate winners from laggards, as input costs, capex intensity and wage inflation remain elevated, and customers continue to push for shorter lead times and higher customisation.
From a talent perspective, the first quarter of 2026 is likely to show a steady but selective increase in hiring as budgets reset and delayed 2025 decisions move forward, with a sharper ramp-up from April as confidence in the global cycle solidifies. Competition will be fiercest for senior leaders in operations, engineering, supply chain, and product management who combine deep domain knowledge with experience in scaling, restructuring, or reshoring complex manufacturing footprints.
This tightening market will also intensify cross-border talent flows: US and Asian firms will continue to recruit senior European leaders for global or regional roles, while European companies will seek to repatriate or attract back executives with global or high-volume manufacturing experience. As a result, executive search processes for strategic roles will become more international in scope, more data-driven in their mapping, and more focused on succession readiness and bench depth rather than purely “one-off” replacement hires.
Career Tips
- Continue to network
In a market where investment is flowing into AI data centres, energy infrastructure, and advanced industrial electronics, the most valuable opportunities often arise in fast-growing pockets that are not yet broadly visible on job boards. Proactively building relationships with sector-focused headhunters, senior leaders in your ecosystem, and peers in adjacent segments (for example, moving from vacuum/semicon equipment into power electronics for nuclear-backed data centres) will keep you front of mind when these high-growth teams decide to scale.
- Explore new markets
Professionals who can credibly bridge multiple end markets, such as automotive and industrial automation, or defence and energy infrastructure, are increasingly attractive because they bring pattern recognition across cycles and regulatory regimes. Deliberately seeking exposure to growth arenas such as AI hardware, EMS design services, or nuclear-linked power electronics, even through lateral moves or internal projects, will make your profile more resilient and position you as a rounded candidate for future VP-level roles.
If you are a senior leader in the Electronics and Semiconductors Sector, connect with Zach Fountain to schedule a chat about navigating your next career move.