Electronics manufacturing clusters in Eastern Europe:an ultimate guide

Dr. Balazs Csorjan, investment promotion specialist

2015 edition

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Central- and Eastern EuropeCEE is an emerging manufacturing location inside the European Union.

Electronics is a key sector in many member states, supporting with governmental programs and incentives.

Electronics clusters provide innovative supply chains and focused manufacturing skills, making easier to do business on the European market.

These slides try to introduce the main locations and players in CEE electronics industry.

HungaryHungary has the largest (25%) share in 2013 in regional electronics production. The local suppliers, EMS and OEM companies shape two electronics clusters:

Eastern Hungarian electronics clusterBosch, Electrolux, Flextronics, Samsung, National Instruments, Jabil Curcuit, General Electric - just some of the leading elecronics companies which are doing business east from Budapest.

The location provides: 30% labour cost discount compared to Budapest; 46% of all Hungarian job seekers live here; 95 developed business parks; 600 kms motorways; awards by Financial Times’ fDi MagaineNext slide: a short company video profile: General Electric Hungary

Western Hungarian electronics clusterFoxconn, Visteon, Sanmina-SCI, Nokia/Microsoft, Sanyo, Valeo, Phillips - just some of the leading electronics companies which are doing business in the Western-Hungarian electronics cluster, located west from Budapest.

learn more about Hungarian electronics industry>>

Czech RepublicThe country has the second largest regional share, and the number of electronics headcount reached 160k employees.

Moravian-Silesian electronics clusterThe 2nd largest Czech city, Brno located in the South-Eastern part of the country. Brno has strong technical education on secondary and university level. Electronics has a 20% share in Brno’s economic output, and its two business parks host companies like Acer, Honeywell or Siemens.

company profile: SiemensWith 12k workers, Siemens is one of the largest employers of the country. The near Brno Siemens Electric Machines and Siemens Electromotors are the leading units.

Central Bohemian electronics clusterThe capital city of Prague and its broader metropolitan region is the home of the Czech semiconductor, robotics, consumer electronics industries and electronics higher education.

PolandPoland is the 3rd largest electronics manufacturing country in CEE.

International companies like Flextronics, Alcatel, Jabil, Toshiba etc employ 53,000 people nationwide. The electronics industry is especially strong in the central regions of the country, the Warsaw-Lodz-Bydgoszcz triangle represents the main cluster. Specialised business parks like „Crystal Park” closed to Bydgoszcz provide electronics-oriented environment.

There are a focused Polish chamber of commerce for electronics and telecom industries.

learn more about Poland electronics industry

SlovakiaSlovakia has a Poland-size electronics industry - with the 15% of Polish population. Behind automotive manufacturing, electrinics is the #2 industry in the county.

Western Slovakia electronics clusterThe main cluster bordered by Galanta-Nitra-Trnava-Bratislava, in the Western part of the country. The leading companies are Sony, Samsung, Foxconn and Tesla.

Eastern Slovakia provides much higher unemployment, emerging infrastructure and focused tech education for companies like Panasonic.

Learn more about Slovakia’s electronics industry >>

Higher educationAlmost all clusters have strong university backgrounds, however there are some anomalies. E.g the leading Hungarian universities are located in Eastern Hungary, but there are more electronics companies in the Western part of the country. Or, in Poland, the second largest city Krakow has a tremendous student population (about 200k students!) but the local electronics industry is modest.

The leading universities normally have a strong corporate partnership programmes, and teach the more or less latest technologies.

Emerging clustersEstonia 5k employees in the small Baltic state, but! 14% of total working population has engineering degree (not electronics only)Leading companies: ABB, Ericsson, Eolane

Western RomaniaThe Timisoara-Arad-Oradea-Satu Mare-Cluj bordered area is located in the Northwesten part of Romania, closed to the Hungarian border. The motorway access of the location is solved by the Hungarian M3 and M5 motorways, and by the large-scale Romanian motorway developments in the future. Western Romania provides a super low labour cost level, however in recent years wages are increasing (annual average labour costs were approx. 8,000 € in 2011)

Local supply chains

Governmental agencies in almost all Eastern European countries make relevant efforts to develop local supply chains. The goal of these efforts to embed global companies into the local economies and leverage employment.

HIPA, the Hungarian governmental economic development agency's Subcontracting Department supports the local supply chain developments of OEMs and EMS companies via forums, databases, direct search and financial tools.

The Czech governmental investment promotion agency, CzechInvest provides a terrific Electronics Sector Database, with contact to all industry players, product portfolios, customer references and quality certificates.

Step beyond supplyWhen seeking opportunities in Eastern European electronics industry, do not forget about the option of local manufacturing. The regional industry is boosting because of the world-class infrastructure, the closeness of European markets, the flexible and low-cost local labour pool. And when it's about manufacturing, you can get great governmental incentives.

When it’s about industrial site selection, grants can be the cherry on the cake. I don’t suggest to make a decision based on grants only, but why shouldn’t calculate with free money when some governments and municipalities provide it?

Here you can learn more about Eastern European grants for manufacturing.

About us

Manufacturing Hungary Blog is an information source about the manufacturing topics in Hungary and Eastern Europe. Our goal is to support corporate site selection teams’ job, providing useful information.

Dr. Balazs Csorjan, investment promotion specialist, the former regional director of Hungarian governmental investment promotion agency. Dr. Csorjan has taken part in more hundred site selection projects - he knows your questions.

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thnx a lot!