An electronic product can be competitively priced at the factory gate and still be expensive to manage. Engineering changes, inventory in transit, quality investigations, and delayed launches all affect its commercial performance.
For companies serving European markets, nearshoring and reshoring electronics design and manufacturing offer opportunities to bring these activities closer to customers and decision-makers. Both approaches can improve control over product development and production, but their value depends on the product, supply chain, and business objectives.
At Krakul, we help companies with either approach by connecting electronics design, embedded software, testing, and manufacturing preparation. A successful relocation needs both a capable manufacturing partner and the engineering knowledge required to keep the product reliable, adaptable, and commercially viable.
Nearshoring and reshoring: which approach fits your business?
Nearshoring means moving activities to a country closer to the company’s home operations. For a European business working with suppliers in China, this might mean transferring electronics design or manufacturing to Estonia or another nearby European location.
Reshoring means returning previously offshored activities to the company’s home country. A German business bringing production back from China to Germany, for example, is reshoring.
The distinction concerns the destination. The underlying challenge is shared: transferring the knowledge, processes, and supplier responsibilities needed to develop and manufacture a product successfully.
Neither approach requires every activity to move at once. A company might reshore final assembly while nearshoring electronics design, or bring engineering back to Europe while retaining selected manufacturing activities in Asia. Krakul can support the engineering and production coordination behind either strategy.
Why bring electronics activities closer?
Long supply chains expose businesses to transport disruption and make some problems harder to resolve quickly. UN Trade and Development’s Review of Maritime Transport 2025 documents how geopolitical disruption and rerouting have affected shipping routes and costs. For electronics businesses, this reinforces the value of examining delivery predictability alongside freight prices.
Proximity can also improve everyday product development. Overlapping working hours make technical discussions easier to arrange. Shorter journeys make supplier visits more practical. Bringing engineers, production teams, and customers closer can shorten the path from identifying a problem to validating a solution.
Nearshoring may offer a useful combination of proximity, available expertise, and competitive costs. Reshoring may bring activities closer to internal engineering teams and existing domestic operations. In both cases, the business case should identify which improvements matter and how they will be measured.
Neither approach automatically improves resilience. The OECD’s 2025 analysis found that broad supply-chain relocalisation does not consistently deliver greater stability. The practical lesson is to assess specific dependencies and alternatives before assuming that a shorter supply chain is safer.
Decide which activities should move
Electronics manufacturing services, or EMS, can include PCB assembly, testing, and final product assembly. Electronics design covers a different set of responsibilities, including circuit design, PCB layout, component selection, and embedded firmware.
These activities can move together or in stages, whether the destination is the company’s home country or a nearby European partner.
| Activity | Potential benefit of moving closer | Main transfer consideration |
|---|---|---|
| Electronics and PCB design | Closer alignment with product requirements and engineering decisions | Access to editable design files, specifications, and design history |
| Embedded software | Easier coordination of hardware changes, debugging, and updates | Source code, build tools, licences, and programming access |
| Prototyping | Faster feedback between developers and users | Component availability and representative production processes |
| PCB assembly | Closer production oversight and shorter finished-board transport | Equipment compatibility, purchasing terms, and repeatable quality |
| Testing and final assembly | Earlier fault investigation and closer customer configuration | Test fixtures, acceptance criteria, calibration, and traceability |
Products with frequent revisions, specialist requirements, or relatively small production batches deserve close examination. Their economics may depend heavily on engineering responsiveness.
A mature, high-volume product with stable demand and an effective Chinese supplier may have a weaker relocation case. Transfer costs and disruption could outweigh the benefits.
Compare total cost across the product lifecycle
Factory quotations are essential, but they capture only part of the decision.
A useful comparison includes components, assembly, engineering support, tooling, testing, freight, inventory financing, quality failures, and the cost of introducing changes. It must also include the transition itself: duplicated fixtures, documentation recovery, pilot builds, validation, and temporary production overlap.
Consider a hypothetical industrial device that needs regular firmware and PCB updates. A European partner may quote a higher assembly price while enabling smaller batches and quicker investigations. Whether that produces a saving depends on the value of reduced inventory, fewer obsolete units, and faster product improvements.
China’s established supplier relationships, manufacturing scale, and integrated sourcing can remain commercially attractive. Both nearshoring and reshoring proposals must be evaluated against the actual incumbent operation, including its strengths.
Quality deserves the same discipline. Assess process capability, test coverage, traceability, and corrective action at each supplier. Geography alone establishes none of them.
Understand which dependencies will remain
A device assembled in Europe can still depend on semiconductors, bare PCBs, displays, batteries, materials, or tooling sourced from China and other Asian countries. This applies equally to nearshored and reshored production.
The European Commission’s June 2026 Chips Act 2.0 proposal acknowledges continuing European dependencies in advanced chip manufacturing and semiconductor design. It aims to strengthen capacity; those dependencies have not already been resolved.
Product owners therefore need to examine the bill of materials and critical upstream suppliers. Two assembly sites using the same sole-source component may share the same vulnerability.
Resilience can require alternative component qualification, design changes, inventory for critical parts, and better visibility beyond the immediate manufacturing partner.
Secure the knowledge needed to transfer the product
Before requesting production quotations, establish whether another team can reproduce, test, and maintain the product.
The transfer package should include editable schematics and PCB layouts, a controlled bill of materials, firmware source and build instructions, mechanical drawings, test specifications, and known production issues.
Clarify ownership and access to intellectual property, tooling, software, and production data. Moving closer can make collaboration and oversight easier, but contractual rights and usable documentation still need deliberate attention.
Testing connects the design to repeatable production. Krakul’s published testing work describes developing fixtures, software, and deployment procedures with product owners and EMS partners. That experience illustrates why test engineering belongs inside a nearshoring or reshoring plan.
Build the transition around evidence
A phased transfer lets leadership teams evaluate results before increasing exposure.
- Begin with a technical and commercial assessment. Identify missing documentation, supply dependencies, necessary redesigns, and the full transition budget. Then select a manageable product or variant for a pilot.
- Agree on acceptance criteria before the first build: functionality, production yield, traceability, delivery performance, and cost at the intended volume. Review whether changes require additional compliance assessment or testing.
- Maintain sufficient continuity with the existing operation until the new process is proven. The schedule should follow component lead times, tooling readiness, validation, and customer requirements.
For some businesses, a lasting dual-region model will make sense: European design, prototyping, and selected production alongside established Asian manufacturing. Its additional coordination costs must be justified by flexibility, market access, or reduced exposure.
How Krakul supports nearshoring and reshoring
Considering moving electronics design or manufacturing closer to home, but unsure where to start? Krakul can help you explore whether nearshoring or reshoring makes sense for your business and what the process would involve.
Start with a consultation. We discuss your existing product, current supply chain, and the challenges you want to solve, whether that means long lead times, difficult engineering changes, supplier dependency, or limited production visibility. You do not need to have chosen a destination or decided which activities to move.
Together, we can clarify your priorities, identify the information needed for a technical and commercial assessment, and outline practical next steps. Depending on your situation, that may mean reviewing product documentation, assessing manufacturing readiness, exploring supplier options, or planning a phased transfer.
When you are ready to proceed, Krakul can support the technical work behind the transition. Our capabilities span electronics design, embedded software, testing, and manufacturing preparation. We support supplier selection, design optimisation, and quality, with production delivered through trusted partners in Europe and Asia. Explore Krakul’s services.
Planning to nearshore or reshore electronics design or manufacturing? Talk to Krakul about your product and challenges you want to solve. We can help you understand your options and where to begin.
