Electronics Industry An Opportunity for Egypt

1
Electronics Industry An Opportunity for Egypt

• Adel Adib
• March 2006

2
Presentation Outline

• World Status of the Electronics Industry
• Electronics Market Segmentation.
• Hard Core
• Soft Core
• World Market Share.
• Emerging Technologies.
• Status of the Egyptian Electronics Industry.

3
World Status of the Electronics Industry

• Electronics Industries accounts for more than
  13.4 of the worlds GDP close to 1.4 Trillion
  US
• 1,360,000,000,000
• The biggest among all industrial sectors.
• US electronics industry is bigger than its steel
  and automotive industries combined.
• Highest CAGR (Cumulative Annual Growth Rate)
  about 8
• Electronics industry accounts for 1/4 - 1/3 of
  the GDPs of Asian tigers.

4
Electronics Industry

• Hard Core
• Equipment Manufacturing.
• Component Manufacturing.
• Soft Core
• Design and RD.
• S\W and Embedded Systems.
• System Integration.
• Service and Maintenance.

5
HARD CORE
EQUIPMENT MANUFACTURING
ELECTRONICS INDUSTRY
COMPUTER AND OFFICE EQ.
332 B
33
243 B
24
COMMUNICATION EQ.
214 B
22
INDUSTRIAL CONTROL
133 B
13
CONSUMER ELECTRONICS
81 B
8
AUTOMOTIVE ELECTRONICS
COMPONENT MANUFACTURING
PASSIVE COMPONENT
90B
25
SEMI CONDUCTORS
210 B
58
ELECTROMECHANICAL
60 B
17
SOFT CORE
Design and RD
S\W AND EMBEDED SYSTEMS
SYSTEM INTEGRATION
SERVICE AND MAINTENANCE
Forward
6
Sector Classification

• Computer Office Eq.
• Mainframes.
• Servers, Workstations, Datacoms,.
• PCs Desktop Laptops etc.
• Displays.
• Peripherals (printers, copiers, scanners,.)
  others.

BACK
7
Sector Classification

• Telecoms
• Mobile terminals.
• Mobile infrastructure.
• Public switching (subscribers bay).
• Public switching (access and transportation).
• Private switching, PABXs.
• Terminals and others.

BACK
8

• Industrial / Control
• Railways.
• Power supplies, converters.
• Power distribution.
• Control equipment.
• Medical other instrumentation.

BACK
9

• Consumer - audio video
• Television.
• Set-top boxes.
• Videos other.

BACK
10

• Automotive
• Engine control.
• Chassis.
• Instrument panel.
• Comfort.
• Others.

BACK
11
Components Manufacturing

• Passive Components.
• Semiconductors.
• Electromechanical.

BACK
12
Passive Components

• PCBs - printed circuit boards
• 1. Single Sided2. Double Sided3. Multi-layer
  from 4 to 6 layers4. Multi-layer over 6
  layers5. Flexible, semi-rigid, etc.
• Connectors
• 1. I/O
• 1.1 Coaxial1.2 Circular1.3 Rectangular
• 2. Optical
• 3. PCB
• 4. Automotive, others (sockets, terminals,...)
• Hybrid circuits / MCM (Multi Chip Module)
• 1. MCM-C2. MCM-L, MCM-D, others MCM3. Hybrid
  circuits (power hybrid, opto-hybrid, microwave
  circuit and SAW, resistive networks, others)

BACK
13

• Switches, keyboards
• 1. Membrane keyboards, panels2. Other keyboards
  and panels3. Switches
• Magnetic components
• 1. Deflection and transformers for CRT2. Other
  transformers3. SMD inductors4. Toroidal
   others inductors5. Soft ferrites
• Capacitors
• 1. Film2. Aluminum3. Tantalum4. Ceramic5.
  Other capacitors
• Resistors
• 1. Linear2. Networks3. Non linear resistors
  (NTC, PTC, Varistors)4. Variable
• Piezo, crystal and filters
• 1. Resonators2. Oscillators3. Filters, others

BACK
14
Semiconductors
Source IC Insights, 2003
BACK
15
Semi conductor Market Evolution (WSTS)
BACK
16
Total Semiconductor Sales By End Market
BACK
Source UBS, 2003
17
Major World Players
Pac Rim expanding mainly on the expense of the US
Source IC Insights, 2003
BACK
18
World Market Share
BACK
Forward
19
Major Growth Areas

• The following list represents some of the
  applications driving market expansion
• Handheld Communicators (smart phones).
• Wireless Technologies GPRS/Edge, WiFi,
  Bluetooth, UWB.
• Home Networking WiFi, 10B1000, other.
• Consumer Laptops other PC products.
• High Definition TV.
• Home Theatre Media Centers (Audio, Media
  Server, Other).
• Flat Panel Display Technologies (LCD, Plasma,
  DLP).
• Satellite TV (DirecTV, EchoStar, Voom).

BACK
20
Major Growth Areas (contd)

• Video Recording (TiVo, DVRs, DVD, Set Top
  Boxes).
• Digital Photography and Printing (Cameras,
  Camcorder.
• Flash Memory Storage Devices (SD, MiniSD, XD,
  Mem. Stick).
• Satellite Radio (XM, Sirius).
• Digital Audio MP3 Players (iPod, Digital
  Stereo, Digital Radio).
• Satellite Navigation (GPS).
• Video Games (Xbox, Playstation, PSP1, GameBoy,
  etc).
• Digital Radio.

BACK
21
Emerging Technologies

• Intelligent Devices.
• Nano Technologies.
• Automotive Electronics.
• Telemetics.
• Embedded Systems Design.
• Security Systems.
• Wireless Comm.
• RFID.
• GPS.
• All-in-one devices TV, Cell phone, Remote Control
  ..etc.
• IP Addressable Devices.
• Home and Building automation.
• Robotics.

BACK
22
Vision to the Future

• By 2009
• Data processing 23
• Telecommunications 24
• Industrial and Medical 16
• Aerospace and defense 6,5
• Audio-video will represent 14.5
• Home appliance electronics 6,9 Automotive
  9

23
Vision to the Future

• Automotive electronics will continue to lead the
  whole industry in terms of growth, pulled by the
  diffusion to mid- and low-range cars of
  applications that were reserved to the
  top-of-the-range, rather than by real innovation.
  The industry is facing a new challenge with
  interference problems due to the multiplication
  of new applications. This problem has generated a
  number of initiatives such as AUTOSAR that aiming
  to define standards, especially in the software
  area.
• The acceleration of Consumer Electronics market
  growth is linked to an innovation boom, a drop in
  prices and the opening of new markets. The
  innovation boom is directly related to
  digitalization which is allowing a total renewal
  of consumer electronics products (TVs, cameras,
  printers ...), that are favorably affected by
  convergence. The drop in prices has been a
  constant trend in consumer electronics and
  mass-market products for decades. It is mostly
  due to optimization and rationalization of
  production and design, and to component
  innovation and digitalization. In comparison to
  these factors production localization in Asia or
  Eastern Europe is a marginal and transient
  factor.

24
Vision to the Future

• The PC industry, which used to pull the overall
  market, has recovered in 2003 and 2004 from a
  major slump in 2001-2002. Expected it to grow by
  close to 7 per year in units, to 230 million in
  2009. There will be a slight price decrease over
  the period, despite the increasing share of the
  laptops which will pull the market, and the value
  will see a 5 annual growth to 120 billion euros
  in 2009, about 10 of the total electronics
  industry. Passing Taiwan, China has become the
  leading world manufacturer of PCs (30 in 2004,
  and this share will grow to 35 by 2009).
• In Telecommunications the mobile segment will
  drive the market with an annual growth rate of
  5, whereas the total market will only grow by
  less than 4 per year. The shift of mobile
  telephony to 3G will enable this growth. The
  mobile handsets will represent a 100 billion
  euros market, not so far from the PC market, and
  a 1 billion units market

25
Vision to the Future

• Defense and Aerospace electronics will grow at a
  steady pace of 3.5 per year. The military
  segment is clearly driven by the USA, which
  supports its industry through huge budget
  increases while Europe struggles as it can on
  export markets. The civil segment is more
  balanced, and rather in favor of Europe as Airbus
  is making life difficult for Boeing, and
  Arianespace is successfully continuing its
  launches despite strong world-wide competition.
• Industrial and Medical electronics should find
  their way back to a slow but steady growth
  (almost 5 per year), driven by the automation
  sector. In this area, North America and Europe
  represent two thirds of the market and will keep
  their positions.

26
THE EGYPTIAN ELECTRONICS INDUSTRY

• Do we have a chance.
• ?????
• Yes ..
• If we learn the lesson

27
Asian Tigers

• Clear Strategy
• All Parties Commitment
• Different Incentive Packages
• SUCCESS

28
Asian Tigers

• South Korea
• Mega Companies (Gov. Support)
• Alliance with USA (Defete Japan)
• Mass production (Modern Production Lines).
• J.V. in Intl Markets to sell Components.
• RD support.
• Soft Loans.
• IP protection.

• Singapore
• First Class Infra Structure
• Cheap labor
• Venture Capital (Gov. Support)
• Capital Investment Sharing.
• Intl. Marketing Offices.

29
Asian Tigers

• Taiwan
• Intl. Mkt. Research.
• Strategy for high added value industry
• Full support for RD specially the high risk.
• Envolvment of Taiwanese Expats.
• Heavy Investment in training (7900 graduate in
  1983- 180,000 in 1988) .
• Training of graduates in USA.
• Incentive for mega intl. companies (IBM).

• Hong Kong
• Passive Contribution . Market Mechanisms.
• No governmental interference.
• Driven by small companies.
• Low technologies.
• Low investments.
• Volume production.
• Low added value.

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Egyptian Electronics Industry(Strength)

• Existing production capabilities.
• Large base of University Graduates.
• Large Mass of Technicians.
• Increasing local needs.
• Local interest from most Intl. Players.

BACK
31
Egyptian Electronics Industry(Weakness)

• Industry Based on low-level technology licensing
• Imported know-how
• Kit assembly
• Very limited design efforts.
• Weak feeding industries.
• Poor technical marketing.
• Non-export oriented.
• Accounts for around 0.5 of Egypts GDP.
• Lack of linkage between the industry and the
  Research.
• Lack of a national strategy for the electronics
  industry.
• Lack of funding mechanisms.

BACK
32
Egyptian Electronics Industry (Opportunities)

• Replacement of Imports
• Computers, Copiers, Printers.
• Communication Equipment.
• Cell phones.
• Control Equipment.
• Modernization Programs
• POS for Ration Control.
• Electronic Wallet\Money.
• Access Control.
• ID recognition.
• Telecom and wireless comm. Equipment.
  (Wi-Fi,Wi-Max)
• CDMA equipment.
• VOIP

BACK
33
Egyptian Electronics Industry (Opportunities)

• Community Needs
• Traffic control\ Display.
• Energy Saving.
• Utilities Measurement and Control.
• Taxi Metering, Tracking.
• Parking systems.
• Hospitality Systems.
• Export Oriented
• Design and Development.
• Locally developed Systems.
• African markets (low tech. respect to Egyptian
  products- less demanding).

BACK
34
Egyptian Electronics Industry (Threats)

• China is a major competitor for mass-market
  products.
• India has potential in the Consumer Products and
  Design.
• Turkey is a close competitor for foreign
  Investors.
• Israel has significant interest in Africa.
• Dubai Silicon Oasis for design outsourcing.
• Brain drainage to the West.

BACK
35
Egyptian Electronics Industry (Requirements)

• Transparency of Governmental Plans and Tenders.
• Adaptation of Educational Programs.
• Incentive packages for SMEs.
• Venture Capital, and financial packages.
• Incentive for co-operation projects Academia
  Industry.
• Motivation for Innovation.
• Compensation for RD.
• Alliance with Intl. Companies.
• Regional and Intl. Market Studies.
• Intl. Marketing Companies.
• Incentive for Intl. MKTG and Exhibitions.

BACK
36

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37

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38
THANK YOU
BACK
39
Electronics Industry USA

• The largest producer. 383 B in 2000.
• Production fall by 33. 256 B in 2003.
• Market size. 362 B in 2003.

BACK
40
Electronics Industry Japan

• The worlds second producer. 15 of the world
• The third largest market. 12 of the world
• The largest component producer.

BACK
41
Electronics Industry Germany

• Fourth world producer and Largest in Europe.
• Dominating the Industrial and automotive
  Electronics.

BACK
42
Electronics Industry UK

• The second producer and consumer in Europe.
• Dominating professional equipment. 71of the
  production.

BACK
43
Electronics Industry France

• The third rank in Europe.
• Fixed and wireless Comm. Eq. account for 43 of
  the total production.

BACK
44
Electronics Industry Italy

• Ranked fourth in Europe.
• Fallen to fifth after Ireland.
• Computer represents one third of the total.

BACK
45
Electronics Industry Ireland

• Counted fourth in Europe.
• Computer sector is the largest sector.
• Manufacturing by International companies.
• Medical electronics is growing 9 total.

BACK
46
Electronics Industry China

• Dominating the global electronics industry and
  ranked third after USA and Japan.
• The country accounted for nearly 13 of global
  output in 2003 (147 B), compared to 4 in 1997,
  and 2.3 in1993 (17.7B).
• Expected to reach 16 of global market in 2007
  (215 B).
• The world second largest market of 138B.

BACK
47
Electronics Industry China (contd)

• Expected annual growth 13 per year till 2007.
• Boosted by
• A growing indigenous industry .
• Influx of overseas manufacturers looking for
  substantial cost savings.
• A growing domestic market, forecast to account
  for 16 of the global market by 2007.

BACK
48
Electronics Industry S. Korea

• Global market share is 4.
• Components represent 41 of the total.
• Leading in communication cell phones.

BACK
49
Electronics Industry H.K Taiwan

• Losing Market share to China.
• Hong Kong Taiwan

BACK
50
Electronics Industry Rising Stars

• Indonesia

• Philippines

• India

• Malaysia

BACK
51
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52
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53
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54
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55

• H\Elec. Industry presentation\part2fig3.gif

56
Switzerland
Taiwan
UK
US
57
Singapore
South Korea
Spain
Sweden
58
Netherlands
Norway
Portugal
Philippines
59
Ireland
Italy
Japan
Malaysia
60
Greece
Hong Kong
India
Indonesia
61
Fenland
Denmark
France
Germany
62
Austria
Brazil
Canada
Belgium