Business Cycles & Markets

South Korea is one of the world’s leading industrialized nations and, ahead of Germany, the fourth-largest electro and digital market in the world. South Korea’s electro industry stands to benefit from several economic trends, but it also competes directly with its major rival, China. Although German electro exports to South Korea declined last year, the country remains a key supplier of the German electro and digital industry, particularly in the semiconductor sector.

India is the most populous country in the world, the sixth-largest economy and also the sixth-largest electro market. India's market for electrical and electronic goods is also growing dynamically, as evidenced by the nine-fold increase in German exports to the country since 2000. Even if India has not yet reached the importance of its neighbor China, geopolitical developments and high growth rates are promoting India's economic rise and its role as an important trading partner for the German electro and digital industry.

According to the latest calculations by the ZVEI, the global market for goods of the electro and digital industry reached a value of €5,765bn in 2024. For the current year, the global electro market is expected to grow by 3%. This would mean that growth remains subdued compared to the long-term average (5% p.a. since 1995). Next year, growth in the global market could pick up again slightly: the ZVEI forecasts growth of 5% for 2026. This would make the market be worth more than 6 trillion euros.

Trade conflicts in an increasingly fragmented global economy remain a significant risk. The electro and digital industry, with its international value chains and sales markets, is particularly dependent on the freest possible movement of goods.

The annual fact sheet summarizes the most important data and forecasts for the global Electro and Digital Industry.

China is of great importance to the German electro and digital industry. With a share of just under forty percent, the Chinese market is the world's largest national market. For the German electro and digital industry, China was not only the main target of exports in 2024, but was also the largest investment location for foreign direct investment in 2023.

With the widespread introduction of new (high) tariffs, the new US administration is implementing nothing less than a paradigm shift in decades of American trade policy: away from free trade wherever possible, towards a pronounced isolation of the US market. This paper analyzes the potential impact of US tariff policy on the German electro and digital industry (EDI).