Israel Association of Electronics and Software

Industries - 2008

2

Presentation AgendaPresentation Agenda

• Electronic & Software Industries.Electronic & Software Industries.

• What’s happening in hi-tech?What’s happening in hi-tech?

Israel R&D in first placeIsrael R&D in first place with 4.8% with 4.8% of GDPof GDP

Industrial R&D Industrial R&D CooperationCooperation Agreements Agreements

BelgiumBelgium

CanadaCanada

ChinaChina

FranceFrance

Hong KongHong Kong

ItalyItaly

NetherlandsNetherlands

PortugalPortugal

UKUK

USAUSA

SingaporeSingapore

IrelandIreland

SwedenSweden

FinlandFinland

GermanyGermany

IndiaIndia

AustriaAustria

KoreaKorea SpainSpain

Source: MATIMOP / MOF

Availability of scientists andAvailability of scientists and engineersengineers

Israel is 3 st by Availability of Scientists and engineers

The Global Competitiveness Report 2007 - 2008

Capacity For InnovationCapacity For Innovation

Israel is 10 st by Capacity For Innovation

The Global Competitiveness Report 2007 - 2008

Utility PatentsUtility Patents

Israel is 5 st by Utility Patents

The Global Competitiveness Report 2007 - 2008

Electronic & SoftwareElectronic & Software

IndustriesIndustries

Electronics Industry & Electronics Industry & Software Export & Local sale -Software Export & Local sale -

millionsmillions)$ )$ ))

20,600

18,700

16,70015,800

13,17013,040

14,75015,500

Israel Electronic & Software Israel Electronic & Software IndustriesIndustries

Electronics Industry Electronics Industry EmployeesEmployees ((thousandsthousands))

Israel Electronics& Information Industries

Telecommunications Telecommunications EquipmentsEquipments

Fiberoptic & Photonic Systems SDH, SONET Access - XDSL ATM, Frame Relay IP Networks – Voice, Video, Data, Multimedia Routers, Load Balancing Test Equipment, Quality Monitoring of Networks 3G Applications Home Network Storage Area Networks Wireless Local Loop, Microwave VPN, Firewalls Video- Compression, Video-Conferencing & Video Networks

22.9%

Major Military SystemsMajor Military Systems Missiles and Guided Weapons Anti Aircraft and Anti – Missiles Systems Radars – Airborne, Naval, Ground EW Equipments Routers, Load balancing Test Equipment, Quality Monitoring of Networks 3G Applications Home Networks Storage Area Networks Wireless Local Loop, Microwave VPN, Firewalls Video-Compression, Video-Conferencing & Video Networks

13.4%

Major Medical EquipmentsMajor Medical Equipments

Imaging and Diagnostic Equipment

Surgical and Treatment Equipment

Monitoring Systems

8.8%

Major Industrial EquipmentsMajor Industrial Equipments Computerized Production Equipment

Computerized Control Systems

Test Equipment

Training and Education Systems

Consumer Products

Security Equipment

17.8%

Electronic ComponentsElectronic ComponentsSEMICONDUCTORS

Design Centers Manufacturing Facilities

PASSIVE COMPONENTS

Resistors & Networks Capacitors Transformers Batteries P.C. Boards

ACTIVE COMPONENTS

Tubes Power Supplies Oscillators Detectors Microelectronic Components Microwave Components

13.4%

SoftwareSoftware

Internet

Multimedia

Software - Products

Software – Turnkey Projects

Software – Subcontracting

23.7%

What’s happening in hi-techWhat’s happening in hi-tech??

Strengths: • Entrepreneurial Spirit • Highly Qualified Scientists & Engineers

• Proven Track Record

 Engines: • Government Support (R&D, Investment) • Venture Capital

Results: • Strong R&D • New Technologies and Applications • Numerous New Start-ups • International Involvement (Acquisitions

& Subsidiaries)

High Tech Characteristics in High Tech Characteristics in IsraelIsrael

Main Fields of ActivitiesMain Fields of Activities::

TelecommunicationsTelecommunications

Information TechnologiesInformation Technologies

Semiconductors forSemiconductors for……

MedicalMedical

Conversion of Military Technologies to CivilianConversion of Military Technologies to Civilian ProductsProducts..

START - UPSSTART - UPS

Mobile, 3G, Broadband, Wi Fi, Internet, Data Comm, Security, wi MaxFabless

New Applications to Reduce Health – Care Cost

Highlights in Israeli Highlights in Israeli InnovationInnovation

Pentium (Intel) Centrino (intel) Telecom Billing (Amdocs) Call Center Logging (Nice / Verint) Voice Mail (Comverse) Instant Messaging (ICQ Ubique) PC Board Inspection (Orbotech) VoIP (Vocaltec) Two – bit per cell Flash Memory (Saifun) Disk on Key (M-systems) Firewall (Checkpoint) Sw Performance (Mercury Interactive) Anti Virus (Alladin, Commtouch…) Virtual Colonoscopy (Given Imaging)

Foreign Electronic Foreign Electronic SubsidiariesSubsidiaries

Motorola Intel Lucent Technologist

Micrsoft

Avaya IBM Nortel Sun Microsystems Siemens Cisco Alcatel 3 Com Philips HP Ericsson Texas Instruments Nokia National S.c ADC ST Microelectronics Qualcomm Infineon Applied Materials Analog Devices KLT - Tencor Vishay Kulicke & Soffa AVX (Kyocera) BAE Systems Ind General Electric Astronautics Philips Medical

Foreign Investments in Foreign Investments in IsraelIsrael

2006 - 20072006 - 20074,000 $ M

4,500 $ M

1,500 $ M

800 $ M

300 $ M

150 $ M

150 $ M

Foreign Investments in Foreign Investments in IsraelIsrael 2006 - 20072006 - 2007

90 $ M

90 $ M

76 $ M

50 $ M

40 $ M

Med Impuls

What do we need to continue our What do we need to continue our successsuccess??

11 ( (Excel in our education – aspire to being the best in theExcel in our education – aspire to being the best in the worldworld..

22 ) )Keep raising the bar in educationKeep raising the bar in education..33 ) )Teach innovation and creativityTeach innovation and creativity..

44 ) )Strengthen partnerships between academia and Strengthen partnerships between academia and industryindustry..

55 ) )Support sophisticated, small ( 20-50 $M) industries – ifSupport sophisticated, small ( 20-50 $M) industries – if you. you. want to be large, gather together many small want to be large, gather together many small……

66 ) )Government support should match or even exceed otherGovernment support should match or even exceed other countries’ incentive planscountries’ incentive plans . .

Keep pushingKeep pushing!!

““Apart from the 6,000 jobs that we have provided here,Apart from the 6,000 jobs that we have provided here, in in my opinionmy opinion the contribution to Israel lies in the the contribution to Israel lies in the fact that Intel has attracted other companies to fact that Intel has attracted other companies to invest in Israel and to create an entrepreneurial invest in Israel and to create an entrepreneurial environment. Globally speaking, Israel is in 3rd environment. Globally speaking, Israel is in 3rd place in terms of IP and is a very good place for place in terms of IP and is a very good place for opening businesses. The level of education in Israel opening businesses. The level of education in Israel has helped us expand. Israel’s ability to supply very has helped us expand. Israel’s ability to supply very good scientists has helped us, and the government’s good scientists has helped us, and the government’s

positive attitude has helped us attract investmentspositive attitude has helped us attract investments”.”.

CRAIG BART:CRAIG BART: former former Intel Intel CEOCEO

( visiting Israel ) ( visiting Israel )

“Considering the density of Israeli start-ups and local successes, Israel is like a bit of Silicon Valley.

Bill Gates, the Microsoft CEO, Bill Gates, the Microsoft CEO, made his first trek to Israelmade his first trek to Israel

Asked how come he chose Israel as Asked how come he chose Israel as his first investment outside America, his first investment outside America,

Buffett's response was: "Some Buffett's response was: "Some Americans came looking for oil, so Americans came looking for oil, so

they didn't stop in Israel.they didn't stop in Israel. We came looking for brains, so we We came looking for brains, so we

did stop indid stop in IsraelIsrael".".

Contact DetailsContact DetailsAssociation Of Association Of

ElectronicElectronic && Software IndustriesSoftware Industries

T: 972:3-5198862T: 972:3-5198862EmailEmail : :

www.iaesi.org.ilwww.iaesi.org.il