Electronics industry in Romania

The electronics sector is a key branch of the Romanian and European economy with rapid growth rates and an important contribution to technological and industrial development. A recent Industrial Policy Report by the European Commission estimates that EU electronics account for roughly 15% of all industrial production globally and is growing by over EUR 100 billion every year. Romania, whose role in this sector is becoming increasingly important, is emerging as a major regional player.

According to the World Bank, the country has undergone a massive industrial transformation since 1990 focusing on the modernization of production and attracting foreign investors, mainly in high-tech industries. The European Investment Fund in its 2020 analysis shows that the country’s electronics industry is starting to attract significant investments, especially in automotive electronics and telecommunication equipment.

Current state of the sector

Today Romania`s electronics industry is characterized by dynamic development and production diversification. The main sectors include the production of electronic components such as semiconductors, printed circuit boards, and industrial electronics and the assembly of electronic equipment and consumer electronics.
Among the leading enterprises in Romania are domestic and foreign companies using the country as a development and production hub. Companies involved in automotive electronics, telecommunications equipment and industrial automation are examples of such large investors.

Geographically, the industry is centered around a couple of regions: large cities such as Bucharest, Cluj-Napoca, Timisoara and Iasi are important business hubs where innovation thrives, and skilled talent is attracted. According to a study by the Institute for Economic Research of the Romanian Academy of Sciences (2023), the electronics sector represents one of the leading industrial sectors with over 25 000 employees and an annual turnover of over EUR 3 billion. The study highlights the location of large foreign companies such as Continental Automotive, Bosch and Siemens, which operate production facilities and research centers in large cities and areas, for example Timisoara and Cluj-Napoca. Deloitte’s “Romania Technology Sector Report” (2022) informs that EU-supported industrial parks contribute positively to the innovation processes as well as to the attraction of highly skilled experts.

Advantages and challenges

Romania has several key competitive advantages in the electronics industry in comparison to other SEE countries. Among them is the qualified and skilled but cost-effective workforce relative to Western Europe. Romania is also geographically well-placed as a bridge between Eastern and Western Europe, and transportation and supply chains are straightforward. The access to European development and innovation funds also attracts foreign investors.
The electronics industry in Romania also faces certain challenges. International competition from low-cost countries, such as Asian nations, is a pressing concern. The lack of big research and development centers limits the potential of manufacturing new technologies. Besides, infrastructure problems and bureaucratic obstacles sometimes deter investments, current reports show.

According to the 2021 European Bank for Reconstruction and Development (EBRD) report, Romania is a country with huge potential due to low production costs and an educated workforce. With that, the issue of needing to invest more in research and development (R&D) and improving infrastructure is also highlighted.

Sector overview

Romania`s electronics industry is dominated by large global companies who have established stable development and production footholds in the country. They provide a wide range of products and services that vary from industrial, consumer and automotive electronics to assembly of complex electronic modules for international export.
One of the most significant companies is Continental Automotive Romania, which has several production and R&D centers in cities such as Timisoara, Sibiu, Brasov and Iasi. The company is dedicated to the development of automotive electronics, including on-board computers, automatic steering sensors, and electronic braking control systems. In addition to its production capacity, Continental also conducts serious R&D focused on the future of autonomous cars.

Another leading company is Bosch Romania, which has operations in Cluj-Napoca and Blaz. Bosch focuses on designing electronic engine management systems, intelligent sensors and microchips for the automotive industry. From its engineering hub in Cluj, the company is actively investing in research in domains of artificial intelligence, machine learning and automation.

In the electronics manufacturing services (EMS) business segment, a primary role is played by Flex Romania in Timisoara. Flex offers printed circuit board manufacturing services, electronic module assembly and full logistics services to customers from industrial, medical and telecom sectors.

Emerson Romania, having its base in Cluj-Napoca, also plays a significant role in industrial electronics. The company manufactures and develops sensors and systems for industrial control and monitoring, by merging engineering, production and development activities.

In the northwest part of the country, Zollner Elektronik Romania (Satu Mare) and Celestica Romania (Oradea) are also among the major production centers. They produce electronic modules and mechanical components for export to foreign customers across industries from the automobile industry to consumer electronics.
Hirschmann Automotive, with headquarters in Sibiu, specializes in the manufacturing of electrical connectors, cable systems and components for vehicles, with a high level of automation and assembly accuracy.

Regarding product niches, the Romanian electronics sector is focused on automotive electronics, printed circuit board manufacturing, industrial automation and engineering services for embedded systems. In addition, Romania is an important centre for the so-called EMS services – assembly, testing and supply logistics of electronic products for foreign brands.

The presence of a high-skilled engineering workforce, coupled with low production cost and EU incentives, makes Romania increasingly attractive for electronics investments. Global analysis prognoses indicate that fields such as automotive electronics, Internet of Things and industrial automation will keep developing in the next decade, making Romania a key player in Central and Eastern Europe.

The Romanian Association of Electronics and Software Industry (ARIES) is a professional, non-governmental organization, with over 370 members at national level. ARIES is organized in 5 branches: Cluj-Napoca, Brasov, Craiova, Iasi and Timisoara (the largest branch by member number). ARIES acts as access point to all information about the Romanian Information and Communication Technologies (ITC) market.

Future prospects

The future of the electronics industry in Romania will be influenced by the growing interest in digitalization and technological innovation, local investment experts say. Investment in areas such as semiconductors, Internet of Things (IoT), green energy and industrial automation can establish the country as a major force in the European market.

The European Commission, in its report "Digital Economy and Society Index (DESI) 2023", indicates that Romania has significant potential to become a center for the production of high-tech electronic components, thanks to efforts in the field of digitalization and sustainable development.
According to a McKinsey & Company report, investments in IoT, 5G technologies and green energy could increase Romania’s industrial exports by up to 30% over the next decade.

The Romanian electronics sector has great prospects ahead, already sustainably supporting the country`s economy. Availability of skilled workforce, favorable location and support from European funds are good chances for long-term development. Despite the challenges that exist today, the future of the industry seems bright, as it can become one of the accelerators of economic modernization and technological innovation in the future.