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Publication Date: 10/1/2009
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Electronics Expanding in the Czech Republic

The Czech Republic is one of the most successful transition countries in terms of foreign direct investment per capita. The introduction of investment incentives in 1998 stimulated a massive inflow of foreign direct investment in greenfield and brownfield projects. The Czech Republic's accession to the European Union in 2004 further boosted investment. Today, over 138,000 Czech firms across all sectors are supported by foreign capital, and U.S. company investments currently make America the second largest investor in the Czech Republic.

The strength of the Czech EE/electronics sector stems from its long tradition and the extensive skills of its employees. Production of EE/electronics products has been linked to Czech or, previously, Czechoslovak industry since the beginning of the 20th century. Czech companies like the TESLA conglomerate developed and manufactured a wide variety of EE/electronics products ranging from electric motors and consumer electronics to semiconductor technology even before the arrival of foreign investors at the end of the millennium.

The consumer sector has grown rapidly, particularly due to the boom in the flat panel display industry and the presence of well-known manufacturers like Panasonic, Foxconn and Qisda followed by other consumer electronics companies such as Bang & Olufsen.

The sharp growth of the automotive sector in the Czech Republic and neighboring countries has also attracted a number of automotive electronics suppliers including Siemens, Bosch, Tyco and Kostal. FEI, ABB and ON Semiconductor offer good examples of how local expertise in specific fields can be utilized for high-tech manufacturing as well as R&D activities.

Whole New Era
The pre-1989 Czechoslovak electronics industry was dominated by the state-run conglomerate TESLA. They produced world-class equipment including the well-known passive radar, Tamara, that was later acquired by a company called ERA. The company produced air traffic control applications and established very good brand equity for its products. The products were in fact so superior that when U.S. competitor Ronnoch bought ERA, it dropped its own brand in favor of using the ERA name for its full range of products. Today, the company is part of SRA International.

The country's expertise goes well beyond radars. The former Czechoslovakia was among the first four countries in the world to build an electron microscope. Today several electron microscopy companies are based in the Czech Republic. For example, FEI Company employs over 300 people in Brno, including 70 in R&D. The company produces devices with resolutions a low as 0.1 nanometer.

Your Xbox Is Czech
Czech TESCAN, an electron microscopy company, was founded in 1991. The company produces Scanning Electron Microscopes and related devices as well as instrumentation utilizing charge particle optics. The company employs roughly 100 people and its main markets are Korea, USA, EU, China, Russia and India. Delong Instruments is another such company, led by the same engineer who invented the first Czech electron microscope approximately 50 years ago.. The Czech Republic also has tremendous experience making small electronics. For example, Microsoft and Sony use integrated circuits produced in the Czech Republic for their Xbox and Playstation 2 consoles. Semiconductor manufacturing in the Czech Republic dates back to the early 1950s.

Today, ON Semiconductor's 880 employees manufacture prime polished and epitaxial silicon wafers of 100-150 mm diameter and a wide variety of analog and bipolar integrated circuits in the Czech Republic. The company also has two Czech R&D and design centers employing over 200 engineers. Other important microelectronics companies operating in the Czech Republic include STMicroelectronics or ASICentrum.

Rockwell Automation has been cooperating with the department of cybernetics of the Czech Technical University in Prague since 1991. The jointly run laboratory employs around 50 developers. In addition, eight years ago Rockwell Automation acquired the system integration division from a Czech company Spel, which now employs over 70 top level engineers.

ABB Robotics also runs its robot-making plant in the Czech Republic in conjunction with the Kocks company. Producing around 100 welding units a years, the plant is one of the largest of its kind in Europe. There are also many smaller Czech companies producing smaller robots for various deployment such as the FIREROB, used by firefighting squads. In fact, the very word "robot" comes from the Czech language — from a sci-fi drama published in 1920. Other strong branches of the electronics industry include Heavy-Current Electrical Technology, with Schneider-Electric Moeller and Siemens both operating in the Czech Republic. Siemens employs over 14,000 people in the country.

R&D Leader
The Czech Republic is the regional leader in attracting foreign direct investments. The composition of new projects is shifting from manufacturing to research and development. Underscoring this trend, CzechInvest — the government agency to attract foreign investors — reports that two out of three new projects are in the areas of research and development or services.

In response to this shift, the agency is opening a new technology accelerator for Czech companies in Sunnyvale, California in October 2009. There, in the heart of Silicon Valley, CzechInvest will have a unique opportunity to network with partners and to secure new venture investors for Czech companies whose rent will be paid by the agency. The office also provides an extensive range of services to U.S. companies that want to invest in the Czech Republic.

Contact: CzechInvest, Stepanska 15, 120 00 Prague, Czech Republic +420 296 342 500 fax: +420 296 342 502 E-mail: Web:

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