Electronics & Electrical Components Industry in SLOVAKIA

SARIO GOODIDEASLOVAKIA

SLOVAK INVESTMENT ANDTRADE DEVELOPMENT AGENCY

ENGLISH EDITIONJUNE 2019

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300 million clients in radius

of 1,000 km

600 million clients in radius

of 2,000 km

total area 49,035 km2

population 5.4 millioncapital city Bratislavamember of European Union, Eurozone, Schengen Area, OECD, WTO, NATOtime zone GMT +1 hour

Electronics & Electrical Components Industryin Slovakia

This publication is designed to introduce Slovakia's dynamically growing electronics & electrical components industry (EECI). Herein introduced facts & figures serve to demonstrate sector strengths and to illustrate why Slovakia is an ideal location for doing business in this industry.

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Overview of the Electronics & Electrical Components Industryin Slovakia

The Electronics & Electrical Components Industry (EECI) can be considered as one of the main pillars of Slovak economy. Current situation on the market reflects both — traditional electronics manufacturing (power generators, telephones, radios, etc.) and new trends especially connected to the growing automotive industry in Slovakia (electric motors, microelectronics, sensors). The EECI is one of the strongest contributors to the country's GDP, plays a significant role in the industrial output and is also one of the biggest employers in the country.

People employed in the EECI

Added valuein the EECI

Share of the EECI on the total industrial

production

Average gross monthly salary

in the EEITotal revenues

in the EECI

Companies in the EECI over 20 FTE

74,000

11%

1,050 € 8.88 BN €

217

1.35 BN €

*Only companies with more than 20 employees included.Source: Statistical Office of the Slovak Republic, Yearbook of Industry of the SR 2018

Strategic location in Europe with great export potential

CEE leader in labourproductivity

Political & economic stability

Euro currency as oneof a few in the CEE

Cost–effective, skilled and educated labour force

Excellent multilingual skills

Developed & steadily growinginfrastructure network

One of the most open economies in the world

Great potential for R&Dand innovation

Attractive investmentincentives

1

4

2

3

5

6

9

7

8

10

Top 10 Reasons to Invest in Slovakia

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When History Creates Strong Companies —Over 120 Years of Experience

Source: UPJS, Institute of Geography,Faculty of Science (2008)

1893

1947

1950

1955

1975

1902

1949

1950

1960

Helios — telephones, dynamos, motors(the first electronics company established in Žilina)

Křížík Prešov — electricity meters (currently Křížík GBI)

Tatramat Poprad — boilers, ovens (still in operation)

Služba Nitra — fuse boxes, lighting for automotive industry(still in operation)

MEZ Michalovce — electric motors(currently BSH Drives & Pumps)

BEZ Transformátory — transformers (company still in operation)

SEZ Krompachy — switches, sockets, circuit breaks (still in operation)

Tesla Liptovský Hrádok — telecommunication devices(still in operation)

Tesla Stropkov — telephones, home communication systems(still in operation)

Traditional Hubs of the Electronics & Electrical Components Industry

Tesla Orava,Tesla Liptovský

HrádokZPA Křížík

Prešov

Výskumný ústav výpočtovej techniky

Žilina

TeslaPiešťany

Tesla Vráble,Služba Nitra,Calex Zlaté

Moravce

TatramatMatejovce

SEZKrompachy

KabloKráľovský Chlmec,

Tesla Trebišov,MEZ Michalovce

Tesla Banská Bystrica

TeslaStropkov

TeslaVeľký Krtíš

Elektrosvit Nové Zámky

Kablo Malacky

BEZ Bratislava,Kablo Bratislava,Tesla Bratislava

Traditional labour intensiveproduction in the 60s

Current production usingmodern technologies

Example of Successful Transformation —

BEZ Transformátory

Electrical engineering companies are located across whole Slovakia. Some regions have had a historically strong tradition in this sector. Others have been shaped by new global players and their suppliers coming to the region (e.g. MinebeaMitsumi in Košice). Significant feature of many EEI companies is their connection to the automotive industry supplier network.

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Today's Regional Distribution of the Electronics & Electrical Components Industry

LiptovskýHrádok PrešovPoprad

Trenčín

Nitra

NovéZámky

Bratislava

Senica

Trnava

Piešťany

Žilina

Michalovce

Stropkov

Galanta

RimavskáSobota

Distribution ofEECI Employees in

Slovak Regions

32% Trenčín

4%

20%13%

10%

8%

Trnava

NitraŽilina

Prešov

Bratislava

7%

Košice

6%

Banská Bystrica

Source: Statistical Office of the SR,Yearbook of Industry of the SR 2018, SARIO

Leoni, Siemens,Evpu, Delta Electronics, Bel, Elteco, Enics, Hella,

KraussMaffei, Yura Corporation

Honeywell, Semikron,VAC, Delipro, Vertiv, TRW

Automotive, Hella,Askoll

OMS, Mahle Behr

Senica

Hydac, Eltek, Tesla Liptovský Hrádok, EDMKlauke, SEZ, Panasonic,

VisteonWhirpool, Hengstler,

Embraco

ElektroConnect, Yazaki Wiring

Technologies, BSH

CEMMThome,

KE Elektronik,IEE Sensing,

SEZ Krompachy, Prysmian Group, ELCOM, Klauke,

MinebeaMitsumi

Tesla Stropkov

Yura Corporation, Thorma, Dometic

ZKW,Semecs,

Foxconn, Seong Ji Slovakia, Siix Ems,

SE Bordnetze

Vicente Torns,Osram, Kromberg &

SchubertPPA Controll, BEZ

Transformátory, Seong Ji Slovakia, Sylex, Siemens,

MicroStep

SHC,Datalogic,Samsung

Košice

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Electronics & Electrical Components Industry in Line with the Automotive Industry

E–Mobility

Slovakia is the biggest car producer (per capita)in the world. Beside 4 OEMs in the country (Volkswagen, Kia Motors, PSA Peugeot Citroën, Jaguar Land Rover)a huge part of this success comes from suppliers(more than 330 Tier 1 & Tier 2 suppliers).

Source: Trend Top, 2018

The dominant position of the car manufacturing industry shapes also the electronics & electrical components sector. It would not be possible for automobiles to meet modern safety and fuel economy requirements without sophisticated electronic components. Thanks to this fact companies linked to automobile production record excellent results. Few companies (e.g. Leoni, Vincente Torns) achieved double–digit growth rates in the year 2017. The cable harness segment exported 14 percent more goods abroad thanin the preceding year.

WIRING HARNESSES & ELECTRONIC COMPONENTSMahle Behr, Leoni, SE Bordnetze,

Calearo, Yazaki, Kromberg & Schubert, Prettl Electrical Systems, JOHRAmont,

Yura Corporation, TFC cables, KE Prešov Elektrik, CRT Electronic, Panasonic

Industrial Devices, Mkem, SIIX EMS, Služba Nitra, MTA, CEMM THOME, IEE Sensing,

Vacuumschmelze, TRW, Visteon

EXTERIOR & INTERIOR LIGHTSOSRAM, SEC, CEMM THOME, Služba Nitra,

ZKW, Hella Innenleuchten, Hella Front Lighting, Hella Signal Lighting

ANTENNASCalearo

Slovakia as a major world car manufacturer, is focusing on the technological transformation of the concerned industries. Therefore, the major efforts to transform Slovakia into the electromobility hub of the central Europe had been taken by both, public and private sectors. Some of the Slovak companies have already successfully adapted to these trends due to their high technology and innovation potential.

CHARGING STATIONSMSM Group, Delta Electronics, Greenway

CAR BATTERY & BATTERY PARTSNemak, Panasonic Industrial

Devices, U.S. Steel

Currently, growth of e–mobilitysector has begun to fundamentallychange the outlook of several key industries such as automotiveand EECI.

Examples of EECI Suppliers to

Automotive

Examplesof Producers from the

E–Mobility Sector

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Source: Trend Top 2018, SARIO

COMPANY NAME

Samsung Electronics Slovakia

Whirlpool Slovakia

Panasonic Industrial Devices Slovakia

Foxconn Slovakia

Visteon Electronics Slovakia

ZKW Slovakia

Datalogic Slovakia

TRW Automotive (ZF)

BSH Drives and Pumps

Leoni Slovakia

Vertiv Slovakia

Elster (Honeywell)

PPA Controll

Semikron

OSRAM

KraussMaffei Technologies

Enics Slovakia

Shin Heung Precision Slovakia

Delta Electronics

SIIX EMS

Eltek (Delta Electronics)

PPA Energo

Vincente Torns Slovakia

ABB

Seong Ji Slovakia

Dometic

OMS

LOCATION

Galanta

REVENUES(THS. EUR)

2,377

COUNTRY OF ORIGIN

South Korea

Taiwan Nitra 1,169 1,046

Italy Zavar 205 311barcode scanners,

printed circuit boards

Germany Vrbové 113 594 power semiconductor modules

Japan Nitra 68 310 printed circuit boards

Austria Krušovce 355 2,368 headlights for cars, trucks, motorcycles

Germany Michalovce 202 843electric motors for

household appliances

Germany Nové Zámky 104 1 069light bulbs, special light sources

and accessories

Taiwan Liptovský Hrádok 67 608 backup power source devices

GermanyNové Mestonad Váhom

290 657 automotive safety systems

Germany Trenčín 185 2,464whole cable systems,

e-mobility development

Germany Sučany 90 477electrical cabinets, reactive

processing machines

Slovak Republic Bratislava 66 534 installation of electrical systems

USA Poprad 277 1,385 household appliances

USANové Mestonad Váhom

166 1,127 air conditions and power systems

Switzerland Nová Dubnica 80 500 printed circuit boards

Spain Veľké Kosihy 63 103 electrical wires

Sweden Fiľakovo 51 176 motorhome appliances

USA Námestovo 263 487 electronic dashboards

Germany Stará Turá 143 721 electronic meters

South Korea Šaľa 74 249metal stampings and components

for LCD screens

Switzerland Bratislava 57 167 transformers, microprocessor

Slovak Republic Dojč 48 656 industrial luminaires

Japan Trstená 206 1,659control boards, chargers,

speakers, sensors

Slovak Republic Bratislava 115 768Installation of electrical systems,

distribution equipment

Taiwan Dubnica n. Váhom 73 517 power supplies, rectifiers, inverters

South Korea Bratislava 57 155fitting components to printed

circuit boards

NUMBER OF FTEs

1,812

CORE BUSINESS

LCD moduls and LED screens

LCD and OLED TVsand printed circuit boards

THE LARGEST ELECTRONICS & ELECTRICAL COMPONENTS INDUSTRY COMPANIES IN SLOVAKIA (BY REVENUES)

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Almost 660companies and

4,000 students joined the dual education

in 2018.

BRATISLAVA TRENČÍNNITRA KOŠICETRNAVA ŽILINA PREŠOVBANSKÁBYSTRICAPOSITION

32

7,800

2,000

390+

15,000

3,800

All technical faculties

Students inElectrical Engineering

Graduates in Electrical Engineering

All technical vocational secondary schools

Students in Electrical Engineering fields

Graduates in Electrical Engineering fields

ElectricalOperative

Min.

Max.

950 950

1,400 1,400

ProductionOperative

Min.

Max.

800 750

1,100 1,000

CNCOperative

Min.

Max.

800 700

1,100 1,000

Electrical Design Engineer

Min.

Max.

1,400 1,400

2,000 2,000

ProductionManager

Min.

Max.

3,000 2,700

4,000 3,700

900

1,400

700

900

800

1,200

1,300

1,800

2,000

3,500

900

1,400

700

900

800

1,100

1,200

1,800

2,000

3,500

950

1,400

700

900

800

1,100

1,400

2,000

2,500

3,500

900

1,300

550

700

650

950

900

1,800

2,500

4,000

1,000

1,400

600

800

700

1,000

900

1,800

2,500

4,000

950

1,400

700

850

800

1,100

1,200

1,700

2,500

3,500

AVERAGE GROSS MONTHLY SALARY IN THE EECI (SELECTED POSITIONS/EUR)

Qualified, Productive & Cost–Effective Labour Force

For investors active in electronics & electricalcomponents industry, availability of skilled workforc is a key factor for location selection. Slovak labour force offers outstanding level of productivity and qualification, while still remaining cost–competitive on regionalas well as European levels.

Source: Institute of Education Information & Prognosis of Slovakia for the Academic Year 2017/2018Grafton Recruitment, Salary Guide 2018, Association of the Electrical Engineering of the Slovak republic

DUAL EDUCATIONThe Slovak Government has fully implementeda new dual education framework facilitating combination of theoretical education in schools and practical training in companies. The companies joining the new scheme have the advantage of not only benefiting from a prepared and qualified labor force, but also from the possibility to utilize a related tax relief and other financial benefits.

EECI Related Education

in Slovakia

UniversitiesSecondary Schools

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Growing R&D & Innovation NetworkHighly qualified workforce at affordable costs, presence of technology cluster and established cooperation between companies and domestic universities motivatecompanies to establish their R&D divisions in Slovakia.

R&D SUCCESS STORIES IN ELECTRONICS & ELECTRICAL COMPONENTS INDUSTRY

Electronics & Electrical

Components Industry Platform

The Slovak Academyof Sciences

OSRAMHousehold & automotive

lighting

ELCOMCash registers &

industrial PCs

LEONI Cable harnesses

& switches

MICROSTEP Smart plasma cutting

CNC machines

ENICS Circuit boards

& related products

BSH Drives &pumps

TECHNICOM SCIENCE PARK Technical University of Košice

Science park focused on research of electrical engineering, automation and control systems.

Working on various projects: • engineering and certification lab for

innovation in electronics • UWB sensor technologies • design of electro-mechanical actuator

systems

The Institute of Electrical Engineeringis currently focused on:• physics and technology at nanoscale• III–V compound semiconductors• microelectronic sensors and detectors• applied superconductivity & much more

THE NATIONAL ROBOTICS CENTERSlovak University of Technologyin Bratislava

Center focused on research,support and development ofrobotics.

Working on various projects:• mobile and service robotics• industrial and medical robotics • intelligent control methods

EECI R&D PLATFORMSRUN BY THE UNIVERSITIES

The Association of Electrotechnical Industry of the Slovak Republic(ZEP SR)• headquartered in Bratislava• established 1991• brings together 100 companies in the fields of electrical engineering,

electronics, information and communication technologies

• members employ more than 14 000 people

ZEP activitiesThe aims of the association includesupporting research activities inSlovakia by networking companieswith technical universities and helpto enhance a mutual cooperation.

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The primary role of the investment incentives is to motivate investors to placetheir new projects in regions with higher unemployment and to attract projects with higher added value. The positive impact of a new investment shall be proved by job creation, improved chances for the graduates to get a job, as well as by creation of new entrepreneurial opportunities for local companies.

Investment Incentives

ELIGIBLE PROJECTSThe Act on Investment Aid divides the projects which may be supported into four categories:• Industry• Technology Centers• Combined Projects of Industrial

Production and Technology Center• Shared Services CentersTECHNOLOGY CENTERS

• Minimum investment of 200 ths. EUR on fixed assets in all regions

• Minimum of 20 newly created jobs• Minimum 1,7 fold of average salary in

the district paid to new employeesELIGIBLE COSTS• Costs of land acquisition• Costs of buildings acquisition & construction• Costs of new technological equipment

and machinery acquisition• Intangible long-term assets —

licences, patents, etc.• Rent of new land/buildingOR• Wage costs of new employees for the

period of 2 years

FORMS OF INVESTMENT INCENTIVES• Tax relief• Cash grant • Contributions for the newly created jobs• Rent/Sale of real estate for a discounted

price

INDUSTRYMinimum investment amount, number of newly created jobs and share of new technology are subject to the unemployment rate in the selected district and forms of aid required.

If applying for income tax relief, the following criteria have to be met in regards to particular districts category:• 6 mil. EUR and 60% share of new

technology• 3 mil. EUR and 50% share of new

technology• 1,5 mil. EUR and 40% share of new

technology• 0,2 mil. EUR and 30% share of new

technology• Expansion includes minimum increase

in the production volume or turnover by at least 15%.

Other forms of aid are subject to different requirements.

MAXIMUM REGIONAL INTENSITIES OF INVESTMENT AID IN SLOVAKIA

for SMEs additional 10 to 20 %

SHARED SERVICES CENTERS• Minimum of 50 newly created jobs• Min 1,5 fold of average salary in the

district paid to new employees

25%

35%

35%

Bratislava region excluded

*Conditions differ for projects from 'Priority areas'. Please contact us at invest@sario.sk for more information.

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• Information on foreign territories• Customized search for foreign partners• On-line database of business opportunities• Export Training Centre• Subcontracting assistance

SARIO Profile

INVESTMENT SERVICES

FOREIGN TRADE SERVICES

INNOVATION SUPPORT

SERVICES FOR POTENTIAL INVESTORS

IF YOU ARE LOOKING FOR

SERVICES FOR EXPORTERS

SERVICES FOR ESTABLISHED INVESTORS

• Investment environment overview• Assistance with investment projects implementation• Starting a business consultancy• Sector and regional analyses• Investment incentives consultancy• Site location and suitable real estate consultancy

• Slovak supplier or subcontractor• Information about Slovak export/trade environment• Sourcing opportunities• Forming a joint venture, production cooperation or other forms of partnership

with a Slovak partner

• Identification of local suppliers, service providers• Assistance with expansion preparation and execution• Relocation assistance, work/stay permits• Support of innovation and R&D activities• Social networking

• Support activities for development and popularization of Slovak innovations and R&D environment

• Establishment of relations with domestic and foreign well–established innovative companies

• Interconnection of Slovak R&D capacities with industrial production and investors' needs in order to transfer leading innovative technology processes closer to production praxis

• Encouragement to foreign investors to bring investments with substantial R&D components to the SR

• Ecosystem analysis of local investment opportunities as well as domestic and foreign investors in order to support acquisitions and joint ventures projects

• Specific information from the field, in order to obtain capital and foreign markets penetration

Slovak Investment and Trade Development Agency (SARIO) is a governmental investment and trade promotion agency of the Slovak Republic. The agency was established in 2001 and it operates under the Ministry of Economy of the SR.

over 500 successful SARIO

projects since2002

CEE & TURKEY REGIONBest Investment Promotion

Agency in 2016

AIM Investment Awards Dubai 2017

500+

All our services

are free of charge!

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SARIO I Slovak Investment and Trade Development AgencyTrnavská cesta 100 I 821 01 Bratislava I Slovakia

Copyright © 2019 SARIOThe information in this publication needs to be in every case double–checked to ensure it is up to date.For production of this publication public domain images were used where the source of the image is not credited.

ISBN 978–80–89786–39–8

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invest@sario.sk I trade@sario.sk I www.sario.sk

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PUBLISHERSlovak Investment and Trade Development AgencyTrnavská cesta 100821 01 BratislavaT: +421 2 58 260 100F: +421 2 58 260 109marketing@sario.skwww.sario.sk

GRAPHIC DESIGNSlovak Investment and Trade Development AgencyTrnavská cesta 100821 01 BratislavaT: +421 2 58 260 100F: +421 2 58 260 109marketing@sario.skwww.sario.sk

AUTHORSlovak Investment and Trade Development AgencyTrnavská cesta 100821 01 BratislavaT: +421 2 58 260 100F: +421 2 58 260 109marketing@sario.skwww.sario.sk