EUR: European miltech rethinking links to US and China

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BLUF: European defense and space SMEs are looking for ways to insulate their supply chains from the risk of export controls in the US and China, while anticipating stronger demand for more ‘sovereign’ tech at home.

Meanwhile, as European arms manufacturers face pressure from regulators to stop coating gun barrels with cancer-causing chromium VI, The Arsenal talked to the Canadian coating firm that says it has a safer and better solution. But the European Commission isn’t convinced.

Plus: We took a close look at a draft law under discussion in the British Parliament that would allow the armed forces to bring down drones near their bases.

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Global trade tensions are pushing European small businesses in defense and space technologies to look askance at some of their US and Chinese suppliers, even if their relationships with those companies are good.

European buyers of defense equipment increasingly ask about ‘ITAR-free’ products—meaning no components are subject to the US International Traffic in Arms Regulations, an export control regime—said Jacques Nel, managing director of Belgian startup DroneMatrix, which produces ITAR-free military drones.

“We get that question a lot, and it has become noticeably more frequent over the past 12 to 18 months,” Nel told The Arsenal. “ITAR-free is no longer a nice-to-have; it is often a specific requirement,” he added.

Much of this has to do with the geopolitical shadow cast by American and Chinese threats to neighboring countries. Increased tensions could suddenly upend relations with Europe when defense needs are greatest. 

A senior executive at a European satellite manufacturer, who asked to remain anonymous, told The Arsenal that a major concern is “the risk of export controls that would possibly limit access to components that are critical to our operations.” 

The company, which buys semiconductors and microelectronics from US suppliers like Texas Instruments and AMD, is now looking for European alternatives.

Having traditionally focused on civilian applications, the satellite firm is now looking at defense, “like any space company in Europe,” the executive said. “The big bag of money is with defense at the moment.” 

While the firm’s civilian buyers aren’t raising concerns yet, “we’re trying to be ahead of our clients,” the source added. The company fears that this demand could arise in the future, particularly in government contracts.

“Some parts are impossible to find,” the satellite executive said, but “there are quite a few European microelectronics producers that are jumping into this opportunity.”

One essential satellite component is Field-Programmable Gate Arrays (FPGAs), which are multipurpose processors that can be reconfigured remotely. 

“At the moment, this is predominantly produced by AMD in the US,” the source noted. The next-largest supplier after AMD is another US firm, Intel.

There are European efforts to change this. The European Space Agency, for example, set up a program more than a decade ago to develop radiation-hardened’ FPGAs in Europe. That program is called the Big Re-programmable Array for Versatile Environments (BRAVE).

France’s NanoXplore is a major beneficiary of it. With ESA support, the Paris-based SME released its NG-Medium FPGA in 2017 and obtained certification for ESA missions in 2022. 

At the end of last year, NanoXplore announced it had secured a €20 million investment from MBDA and the Defense Innovation Fund of Bpifrance, the national public investment bank.

The NG-Medium FPGA is marketed as ITAR-free.

But that isn’t the same as being free from dependence on US suppliers, said Nicholas Nelson, a British-American defense tech investor with London-based Archangel Ventures.

For example, some of the advanced cameras used in drones are ITAR restricted—but a lower-resolution one that doesn’t capture the same spectrum made in the same US factory might not be, he pointed out.

The other big trade concern is China. Croatian drone-maker Orqa is one European defense tech company getting attention for its efforts to minimize Chinese influence in its supply chain. 

Based in the northeastern city of Osijek, Orqa specializes in producing drones that comply with the US National Defense Authorization Act (NDAA), which aims to limit the Chinese government’s ability to meddle in US defense supply chains. That would allow Orqa to sell drones to the US via the Pentagon’s Blue UAS Cleared Drone List, without giving the US control over Orqa’s largely European supply chain. Orqa is currently seeking approval for the Blue UAS List.

Orqa’s co-founder and Chief Technology Officer, Vlatko Matijevic, told The Arsenal that their original motivation for avoiding reliance on China was a desire to work with other Croatian companies and to improve on China-dominated products, such as goggles for first-person-view (FPV) drones.

The impulse to source everything within Croatia, a country of less than four million people, turned out to be “very naïve, because you cannot find such expertise just anywhere,” Matijevic said. For a while, Orqa made do with various Chinese parts—until they started working on defense applications and selling to the US.

A semiconductor made in Europe or Taiwan can still be disqualified from the Blue UAS list if it’s packaged in China, Matijevic told The Arsenal.

“We are paying very, very close attention to our supply chain. Some things we are still doing in China, but are in the process of transferring,” he said.

Injection-molded plastic parts, which Orqa is now starting to produce in-house in Osijek, are “by far the most challenging parts to do locally” Matijevic said. 

“It’s not just the injection molding, it’s the step before that. It’s tooling—how do you make the molds for injection-molded plastic? That’s a fine art,” he said. “There are thousands and thousands of companies that are doing that in China right now. In Europe, you could probably find only a few.”

Even sourcing the right kind of screws in Europe was difficult, he said. 

“These screws you can find in any cellphone today. But of course, you cannot buy them anywhere in the EU,” Matijevic told The Arsenal. “If you can buy them from some reseller, it’s again the screws which come from Asia.”

Like all drone manufacturers, Orqa needs permanent magnets for its motors, for which China controls most of the raw materials mining and nearly all the processing. While Orqa’s magnets supplier is a European company, the factory is in China. Even if it weren’t, it would still depend on Chinese-processed materials.

Nelson, the defense tech investor, said the NDAA and the Blue UAS list demonstrate that “it is extremely difficult, as the US has proven, to completely decouple from a major trading partner.” 

“It’s taken forever, it’s driven up costs,” he said. “We’ve seen public companies in the defense ecosystem in the US saying, ‘Hey, we can’t do this, there is no fundamental way we can get [China] out of our supply chain in the next year, two years.’”

“You do need that sovereignty,” he added. “But it’s not an overnight process.” 

There’s enough interdependence between the US and Europe to keep trade going, “no matter how acrimonious things get,” he said.

European arms companies face regulatory pressure to stop lining gun and rifle barrels with chromium VI, which is a cancer risk for workers. A Canadian firm says it has the solution, but the European Commission is unconvinced. 

Toronto-based Paradigm Shift Technologies uses a patented process called Enhanced Physical Vapor Deposition (EPVD) to apply metallic coatings that don’t present the risks of chromium VI. 

Its chief operating officer, Eugene Yumshtyk, told The Arsenal that EPVD also makes barrels four times more durable than chrome plating. 

Physical Vapor Deposition (PVD) involves a high-temperature vacuum to vaporize the metallic coating and deposit it onto exposed surfaces, such as drill bits and saw blades, whereas EPVD can coat the interior surfaces of tubes, such as gun barrels. 

In December 2023, testimony from Paradigm Shift persuaded ECHA’s Committee for Socio-economic Analysis (SEAC) to recommend shortening the duration of Leonardo’s authorization to use chromium trioxide (a form of chromium VI) from 11 years to seven, on the grounds that “there are alternatives available that are technically and economically feasible in NATO countries, although not in commercial use in the EU.”

Citing insufficient evidence, the European Commission disagreed with SEAC and granted Leonardo the 11-year authorization last May.

The Commission said the claim of EPVD as an alternative “is not supported by substantial evidence indicating that that technology could be technically and economically feasible in the [European] Union, in particular concerning the compliance with the applicable NATO standards.”

Yumshtyk suggested that the Commission’s view may be the result of lobbying by EU gun barrel manufacturers. “They see our technology as a threat,” he argued. “It makes the barrel last longer,” resulting in fewer sales.

A Commission spokesperson told The Arsenal that its decision was based on information provided in Leonardo’s authorization request and ECHA’s opinion. That information showed “some discrepancies regarding the technical readiness” of EPVD, the spokesperson said.

EPVD-coated artillery barrels are being used by Ukraine. 

Yumshtyk declined to comment on whether any NATO militaries are equipping soldiers with EPVD-treated rifles, but said that the “technical evidence from live fires with NATO countries proves that EPVD is far superior in performance to chrome plating.”

UPDATE: This article was updated on 12 February 2026 to add the European Commission’s answer to The Arsenal’s question about the basis for its decision regarding EPVD and chromium trioxide.

The British armed forces could get the green light to bring down drones near their bases under a draft law being debated by Parliament. 

The Armed Forces Bill would allow senior officers to authorize the use of “approved equipment” to detect and prevent the unlawful use of drones near military areas. Approval would be the job of the Secretary of State for Defence—currently Labour’s John Healey, who introduced the bill on 15 January.

For example, the British Army has conducted trials of directed energy weapons to bring down drone swarms. 

Existing laws allow police and prison officers—but not defense personnel—to use counter-drone equipment, according to a Ministry of Defence memo.

Even under the new Armed Forces Bill, nobody below the rank of rear admiral (in the Royal Navy), major general (in the British Army or Royal Marines), or air vice-marshal (in the Royal Air Force) would be allowed to authorize the use of counter-drone equipment.

The current Armed Forces Act will expire at the end of the year, so the new bill needs to pass by then to maintain continuity. Parliament agreed to commit the bill to a select committee on 26 January, setting a deadline of 30 April for the committee to report. 

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