If you design hardware, the line between packaging and PCBs is blurring. SiP (System-in-Package) is putting multiple chips into a single module — and PCBs are still responsible for connecting those modules into a system.
When Europe starts building packaging fabs, it's not just changing the semiconductor supply chain. It's changing the logic of PCBA sourcing as well.
Tessalia Technology SAS — a joint venture between Foxconn, Thales, and Radiall — broke ground on June 1, 2026, in Le Barp, Nouvelle-Aquitaine. Total investment exceeds €250 million. At full capacity, the plant will employ 800 people and produce over 50 million System-in-Package components per year by 2033.
This is Europe's first large-scale OSAT (Outsourced Semiconductor Assembly and Test) facility built specifically for defense and aerospace applications.
French Industry Minister Sébastien Martin said at the groundbreaking: "Technological sovereignty doesn't mean doing everything ourselves, but rather not depending on others — building a certain level of domestic production capacity. That's what this partnership means: France gains a technology applicable in strategically valuable niches."
Foxconn Chairman Young Liu added: "This is more than just a fab. It's a strategic platform for advanced manufacturing, semiconductor resilience, and Europe's future technology."
Europe already produces chips and substrates. STMicroelectronics continues to invest in its Crolles 300mm fab, which will reach 14,000 wafers per week by 2027. Soitec holds 70-80% of the global SOI substrate market.
The gap has been in the middle: packaging and test.
Today, most European semiconductors cross the Atlantic or the China Sea to be packaged. Tessalia is designed to break that dependency. The project relies on advanced packaging technology licensed from Foxconn and is strategically located near the Route des Lasers cluster, research labs, and a dense industrial ecosystem.
Key features of the project:
Technology source: Advanced packaging technology licensed from Foxconn
Production scale: Production starting by late 2029, exceeding 50 million SiP components per year by 2033
Target markets: High-reliability sectors including aerospace, telecommunications infrastructure, automotive, and medical
Production model: Small to medium volumes, high-mix production focused on reliability-critical niche markets
As Radiall Chairman Pierre Gattaz put it: "This advanced capacity is a key sovereign asset for the European and French semiconductor industry."
Tessalia isn't an isolated project. The broader European semiconductor ecosystem is moving in parallel.
Amkor Technology operates Europe's largest advanced packaging OSAT facility in Portugal and showcased its capabilities at the Advanced Packaging International conference in April 2026.
SEMI 3D & Systems Summit took place in Dresden (June 17-19, 2026), focusing on "Enabling Next-Generation Heterogeneous Systems Integration" — covering advanced packaging, hybrid bonding, and co-packaged optics.
These developments align with the EU Chips Act, which aims to strengthen regional semiconductor production and reduce external dependencies.
Packaging is moving from "back-end" to "core competency"
SiP and advanced packaging are blurring the line between chips and PCBs. For hardware engineers, this means:
Packaging choices now need to be considered during PCB design
Smaller, lighter components may reshape the entire system architecture
Local packaging capacity in Europe may shorten lead times
European supply chains are being restructured
One of Tessalia's stated goals is to "reduce the carbon footprint and shorten lead times caused by suppliers scattered across the globe." For engineers designing hardware in Europe, this could mean new sourcing options and shorter delivery timelines.
A longer-term view is warranted
As packaging capacity localizes, it may become feasible to specify European packaging partners for critical components, particularly in defense, aerospace, and medical applications where supply chain security is paramount. For hardware engineers, this is worth monitoring — not as an immediate supplier change, but as a shift that could open up new options over the next 3-5 years.
Europe has long relied on Asia for semiconductor packaging and test — consistently identified as one of its greatest strategic weaknesses. The Tessalia groundbreaking marks a substantive step toward closing that gap.
It will take years to go from site to production. But the data from 2026 shows that Europe is moving more of its semiconductor future in-house.
The road is long. But Europe is paving it.
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