Electronics Industry in Turkey

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by Tolga TAYLAN, Export Promotion Center of Turkey

The information and data processing technologies have shown remarkable development. Taking part among the developed countries in the 21st Century, which is called “the information age”, depends upon progress in the electronics and communication sectors and improvement of the competitiveness of the electronics industry by producing our own technology. The Turkish electronics industry is struggling for manufacturing technologies that are products of Turkish engineers and employees. The Turkish electronics industry began to develop rapidly in the second half of the 80’s. Most of the companies started business through foreign licence agreements. The licencors originate from the Netherlands, Germany, Japan, USA, Canada, France, the United Kingdom, Denmark and Italy. Introduction of the colour TV broadcasting and the acceleration in telecommunication investments have supported that rapid development and the revolution in telecommunication technologies which took place in the recent years have increased the growth rate of the sector. Today the sector is a mature industry and has reached to a significant level in technical knowledge.

In Turkey electronics industry is examined in six sub-sectors - Telecommunications Equipment Sub-sector; Consumer Electronics Sub-sector; Computers Sub-sector; Defence Industry Electronics; Professional and Industrial Equipment Sub-sector and Components Sub-sector.

• Telecommunications sub-sector comprises telecommunication cables and wires, transmission equipment, telephone and telegraph automatic exchanges, user end equipment (telephone, teleprinters, telefax etc.), transmitters/receivers for wireless telephone/telgraph equipment, receiver/transmitter antennas for wireless telephone equipment.
• Consumer electronics sub-sector consists of colour televisions, audio appliances, video players, cash registers, audio-video casettes, television satellite receivers and antennas, electronic scales, electronic calculators.
• Products of computers sub-sectors are hardware, software, services and supplies.
• Professional and industrial equipment sub-sector is composed of uninterrupted power supplies, induction ovens, rectifiers, automation systems, signalization and alarm systems, automotive electronics, test and measuring equipment, medical electronics, audio-visual systems, industrial electronic equipment, fire alarm and security systems.
• Components sub-sector covers circuit elements, printed circuit boards, picture tubes, coils and transformers, acoustic elements, connection elements, electronic relays.

According to Turkish Electronic Industry Association’s (TESID) data, total electronics industry production of Turkey was US $ 3,5 billion in 2003. Consumer electronics have the largest share in total production of electronics in Turkey. The share of consumer electronics in the total production of electronics is about 63%. Telecommunication which is the other important subsector accounts for 12% of the total production of the sector. As opposed to consumer electronics, component subsector comprises 3.6% of total electronics production. Since the level of domestic raw materials used in the electronics sector is low, components sub-sector, which provides raw materials for the sector, has the highest import rate.

The electronics industry in Turkey has developed sizeable capacity in two sub-sectors - consumer electronics and telecommunication equipment. Colour televisions are the most significant product group in the consumer electronics subsector. In terms of quantity, production of colour televisions reached 20.5 million units in 2004 with a 34% increase compared to 2003.

Advanced production methods and high technology are being carried out successfully in the Turkish enterprises. The strategy of Turkish companies is based on the quality, innovation, and fast delivery. In order to support this, colour television sector has been continually investing in new technologies, increasing its capacity and expanding its production flexibility. Turkish made colour televisions have a good reputation among European consumers with respect to price and quality. There are approximately 326 firms operational in the television-radio receivers and audio-visual equipment sector employing 9,264 workers. The main factories are located in Istanbul and Manisa.

The other important subsector of electronics industry is telecommunication subsector. Telecommunication equipment production was $412 million in 2003. Main target of Turkey in this subsector, is to establish a rich communication infrastructure and for this reason considerable knowledge and experience have been accumulated. Besides, research and development work played a role in the success recorded by telecommunication subsector. Turkish telecommunication industry is composed of more than 143 companies with large and medium sized companies dominating the industry. The number of people employed in this subsector is approximately 1.537. Telecommunication cables have the largest share in total production of telecommunication equipment. The production of telecommunication cables reached 206 million $ in 2003. The production capacity of telecommunication cables with copper and energy conductors was 100,000 tons in 2002. In the Turkish cables and wires sector almost all kinds of electrical and telecommunication cables, ranging from electrical shaver coils to large energy transmitting cables and telecommunication optic cables, are produced. Major items include insulated enamelled winding wires, coaxial cables, electric conductors and fiber optic cables. With more than 374 cable manufacturers including the plants of multinational cable companies, Turkey has a large potential for cable production. 7796 people are employed in the cables sector. Most of the large telecommunication cable manufacturers are located in Istanbul and Kayseri. A few large companies dominate the industry. Specialization in the production of fiber optic cables is becoming increasingly important.

The production of other important professional and industrial equipment subsector such as uninterrupted power supplies (inverters, converters), automation systems, signalization and alarm systems, induction ovens, test and measuring equipment, medical electronic devices, security systems is carried out by small and medium sized companies in an efficient way.

There are approximately 2033 manufacturing companies in the field of electronics. The number of people employed in this sector is about 30,806.

The Turkish electronics industry manufacturers/exporters follow European and international standards and norms. Companies exporting to the European Union affix the “CE Mark” under the “New Approach” Directives.

Electronics industry products having the most recent technology are supplied to the Turkish market synchronously with Europe. Turkish electronics industry exports are mostly directed to European markets. The total value of exports of electronics reached about US $ 4,2 billion in 2004. As in the production, consumer electronics and telecommunication equipment are the main export items. In 2004, the export value for consumer electronic sub-sector, telecommunication equipment sub-sector, professional & industrial equipment sub-sector, military electronics equipment and components sub-sector were US $ 2.913 million, US $ 603 million, US $ 311 million, US $ 305 million and US $ 104 million, respectively.

Export value of consumer electronics sub-sector realised as US $ 2.913 million in 2004. The most important consumer electronics product is the colour TV. Colour TV exports were 17.9 million units and US $ 2.789 million in 2004. Almost all colour TV exports were destined for the European Union countries in 2004 and show an ever-increasing tendency to gain significant market shares. Turkish colour televisions have 45% market share in European market. Turkish made colour televisions were exported to almost 105 countries throughout the world in 2004. Germany, the United Kingdom, France, Spain, Italy and the Netherlands are the most important export markets for Turkish made colour televisions. According to worldwide statistics for colour televisions, Turkey ranked fourth in 2003 with a market share of 6% among 119 other exporter countries. The export value of empty and full video bands were US $ 26 million in 2004. The important export markets for this product are the Germany, Romania, the Netherlands, Greece, the United Kingdom, USA and Iraq. An increase is expected in the export of other consumer electronics with the introduction of new product lines.

Positive developments in the telecommunications sub-sector, such as intensive infrastructural investments both in Turkey and in abroad by Turk Telekom were reflected in the telecommunications sub-sector exports. In 2004, the export value of the telecommunications sub-sector reached US $ 603 million.

in the total exports of telecommunication subsector. At present, telecommunication cables exports comprise 92% of the Turkish telecommunication equipment subsector and have been increasing significantly. It is worth to mention here that exports of telecommunication cables reached US $ 557.8 million in 2004 with a 17 % increase compared to 2003. Export of telecommunications cables was US $ 478 million in 2003. At present, the top foreign markets for Turkish telecommunications cables are the United Kingdom, Germany, Iraq, Bulgaria Italy and Israel. In 2003, Turkey was the twenty seventh largest exporting country in cables among the 155 exporter countries and Turkey’s share in world exports was 1%. Most of the fiber optic cables which are produced with high technology are exported and total export value was US $ 20.2 million in 2004. Major export markets for fiber optic cables were Iran, Kazakhstan, Bulgaria, Romania, Iraq, Syria, United Arab Emirates and Thailand in 2004.

The export performance of the young but dynamic Turkish electronics industry has been increasing, especially over the last few years, with quality products at reasonable prices. Although present export value is not high on the global scale, it is believed that Turkish electronics will attain significant market shares in foreign markets with their broad range of products, skilled workmanship, engineering quality and close ties with liberal economies.