In 2000, France was the second largest producer of mobile phones in the world. Today, the French electronics industry accounts for around 130,000 jobs, while Germany has 350,000 and Europe has 9.5 million. Between the two, we have mostly talked about labor costs. Wrongly so.
hourly labor cost is not the deciding factor
The reflexive argument against French production is salary. Except that the gap has closed: at the end of 2019, an hour in industry cost around €38.70 in France compared to nearly €42 in Germany. And on an electronic card, direct labor costs only account for a fraction of the factory exit cost. The rest is materials, non-recurring expenses, minimum order volumes, transportation, customs, and the cost of quality returns when the production line is 9,000 km away.
The real French handicap is elsewhere: a rigid and poorly digitized supply chain, a production tool that lacks flexibility, professional electronics that are often behind the general public, and limited investment capacity compared to Asians and Americans. That’s the real calculation.
the obstacle is the industrial base
When we want to relocalize, the first obstacle is not the price, it’s finding the right electronic subcontractor (EMS). The fabric exists, but it needs to be qualified, and that can’t be improvised.
The method that works is like a funnel. In a regional area, we identify around sixty EMS, we meet with twenty, we visit sixteen, and we build a real relationship with a dozen. At each stage, we narrow it down to concrete aspects: factory surface and location, revenue and references, volume capabilities, equipment, certifications, quality processes, waste management, and the ability to test the product (ICT, FCT) as much as to assemble it.
The tipping point is the RFQ. We send the same file to all of them, built on a representative project: complete documentation (BOM, Gerbers, schematics), list and sequencing of tests, operating mode, traceability and packaging requirements. It’s this identical file that makes prices and deadlines comparable. Then we go audit the production line on site. An EMS is not chosen based on a quote, it’s chosen after seeing it produce.
without automation, it doesn’t work
Relocalizing a production line that was previously made in Asia is only viable by automating as much as possible. It’s a condition, not an option. The levers are cumulative: automated CMS lines, automated internal logistics, cobots, modular lines, virtual twin of the back-end, automation of tests and controls, reduction of non-productive machine times, interoperability of information systems. The operator is not replaced, they are augmented.
The effect is double. Automation compensates for the direct labor cost gap, and it attacks indirect labor (inventory management, quality control), which often weighs more heavily than we think. The public framework has followed: the depreciation on productive investments can reach 40% of subsidies for SMEs and ETIs that modernize their tools.
the dead weight that nobody looks at
There is a cost that we systematically forget: inventory. In electronics, 60% of the component market is held by two distributors, on a demand that is increasingly volatile and a rigid supply. Result: inventory at all stages, dead inventory of more than twelve months, and a financial weight that falls mainly on production subcontractors.
A more transparent and mutualized chain could reduce total inventory by around 15%. This is not an accounting line: it’s investment capacity freed up to automate, train, and move up the value chain. Relocalization is not just about the factory, it’s about the entire chain.
so, when does it pay off?
Relocalizing is not a patriotic slogan, it’s a sourcing and industrialization discipline. The calculation tips in favor of France or Europe in specific cases:
- low volumes and high mix, where Asian MOQ and logistics surcharges eat away at the price advantage;
- sensitive intellectual property, where sending Gerbers to the other side of the world is a risk in itself;
- short time-to-market, where the proximity of the production line saves weeks at each iteration;
- traceability and eco-design, which are increasingly regulated, easier to maintain and audit close to home.
The hourly labor cost is no longer the argument. The real question: do you have a qualified EMS base, an automated line, and a digitized chain enough for proximity to become an advantage rather than a surcharge? That’s where the Made in France is won or lost.