Slovenia’s electronic components market

Electronics Technical ArticlesSouth-East European INDUSTRIAL Мarket - issue 2/2022 • 06.07.2022

Slovenia has a geostrategic location, business-stimulating regulations and political stability. These factors make it an excellent ecosystem for business development and growth. This Alpine country also offers dynamic and interesting innovation perspectives as the number of researchers has more than doubled since the year 2000. Investors are aware of Slovenia’s advantages in R&D. Some of the world’s largest companies have formed key global competence centers for products and technologies in Slovenia. And according to a regular annual survey among German investors in central and Eastern Europe, Slovenia is the most attractive location for research and development investments in the region.


Electronics – fastest growing industry in the country

Two of the prime characteristics of Slovenian electronics industry are fast growth and high value-added. In fact, the industry is the fastest growing manufacturing branch in Slovenia. Between 2015 and 2019 the electrical and electronics industry increased its exports by a massive 43,7 percent. Founded on a strong tradition, this sector is turning into one of the key drivers towards a greener and digital future, providing essential components for e-mobility, smart grids, smart homes, and cities.

According to data provided by Spirit Slovenia Business Development Agency the sector is one of the strongest in Slovenian manufacturing with close to EUR 5 billion of annual turnover and around 30 000 employees. This was made possible by a high standard of quality, strong R&D, and constant innovation integrated into its processes. The vast majority of the sales are generated by companies in the manufacturing of home appliances, electrical motors, transformers, and equipment for power grids, batteries, cables, pumps, heating and cooling equipment, and various mechatronic components.

Slovenian electronics companies are mostly highly specialized SMEs with leading products in their respective niches in the production of circuit boards, electronic components, optronic and laser devices, telecommunication systems, and measurement equipment. Though the electronics manufacturers annually generate less than EUR 850 million, they create over EUR 300 million of value-added – that is around 37 percent – this being one of the highest percentages in Europe, on par with Swiss and German electronics industries.

Advantages of Slovenian electronics production include educated and highly skilled workforce, high operating efficiency, continuing investment in research and development, ability to identify market niches, development and engineering electronics components, integration in local and global supply chains.


Export markets of electronics components

According to data by Statistical Office of the Republic of Slovenia (SORS), dated May 2022, the largest export market in electronics is Serbia (28%), followed by Belgium (14%), Croatia (10%), Philippines (9%) and Germany (7%).
The true rise of the industry started after World War II, with the formation of two large companies, home appliances producer Gorenje and electronics component manufacturer Iskra.

Gorenje is now a part of the Chinese Hisense group and remains one of the largest companies in Slovenia. It is not only the Chinese that rely on Slovenian tradition and know-how. Bosch Siemens has located one of its excellence centers for small home appliances in Slovenia. Many of the popular products of this large manufacturing group were designed in Slovenia.

Home appliances remain one of the most successful sub branches of the industry with over EUR 2 billion of annual sales and a strong local network of suppliers. Some of these suppliers are global leaders in their niche, such as producers of electrical motors for vacuum cleaners for example.
Apart from home appliances, the Slovenian electrical industry focuses on a few select areas. In some of these fields, Slovenian companies enjoy very competitive positions or are even niche leaders. A large share of Slovenian companies is focusing on the needs of the automotive industry. They supply their automotive partners with lighting systems, cables, coils, sensors, antennas for keyless start systems, electronic and mechatronic components, Li-ion batteries, and electrical motors.


Strong niche development in electronics

The electronics industry in Slovenia might be small and yet is a powerful player in clearly defined niches like optotronics, laser technology, medical instruments, and measurement devices. One of the key niches is also the design and manufacturing of printed circuits for highly specialized applications. Slovenian-designed boards are for example used in CERN’s Large Hadron Collider. In fact, there is hardly a major particle accelerator in the world that does not use Slovenian developed measurement devices. Small series and innovative electronic products from Slovenia include, among others, advanced medical and dentistry laser systems, sensors for industrial and medical applications, LED optotronic devices, and lab equipment. The industry enjoys strong support from local research and academic institutions. And over 5 percent of its turnover is reinvested into its own R&D: a share well above the EU average.

Mechatronic components, custom-made electrical motors, and a vast array of sensors are key elements in some of the megatrends like IoT, smart homes and cities, factories 4.0, and e-mobility. And in the development and production of these elements, Slovenian electrical and electronics companies excel. Many already provide both components for smart solutions or engineer entire systems like factory 4.0 production lines. Slovenian-made automatic guided vehicles used in smart logistics centers use locally developed electronic components and solutions. The developers of vehicle tracking systems are preparing solutions for autonomous driving. The locally developed machine vision solutions are indispensable in smart factories. Several companies are active in the field of smart buildings, where automation and control systems for heating and cooling are interwoven with data collection and analysis. In short, the Slovenian electrical and electronics industry has proactively responded to the challenges of the future; providing solutions that are integrated, digital, and – above all – friendlier to the planet.

Printed circuits seem to be one of the key niches for Slovenia’s electronics industry. Among the most advanced developers or producers of PCBs are Ergoline, Intec TIV, Evoteh, Hyb and Proplace. Hyb also develops pressure sensors for industrial use (hybysens) and medical technology. Its hybymed program includes innovative, invasive blood measurement equipment and wireless, closed blood sampling systems. Together with partners Hyb also developed Freehand, an innovative medical device based on an electromotive arm intended for laparoscopic, minimal invasive surgery procedures. Another two companies, which also exhibited at the last edition of electronica, are Etra TT and Sumer. Etra TT manufactures transformers. Sumer is a family business supplying the electronics and home appliance industries with metal and plastic components.
Intec TIV is another manufacturer that excels in state-of-the-art product development. In the year of 2000 the company Ergoline merged with the company Intec TIV Ltd. from Kranj. This move was very beneficial and successful for both companies since they managed to cooperate in development ever since.

Slovenian companies tend to keep close cooperation with institutes and universities in research and development of new technologies. The PCBs produced in Slovenia find application in medicine – high-energy photons for early cancer detection; energy – bipolar plate for electrical to chemical energy conversion – hydrogen in electrolytic cell and bipolar plate for reversible process converting chemical energy of hydrogen to electrical energy. Slovenian PCBs are also used in artificial intelligence for development of intelligent electronics for everyday home use in many devices that enable personal security, energy savings, simplicity and adjustability. Special services are provided for the elderly and people with disabilities as well. Their innovative products are also implemented in Linear accelerator in CERN, which uses electrical and magnetic field for the stimulation of electrically charged atomic and subatomic particles for high speed and collision with others.


Innovation leading the way to success

Undoubtedly, with 541 companies earning EUR 3,8 billion in sales in 2017, and with 28 000 employees, the electrotechnical and electronics industry is amongst Slovenia’s key sectors. Most of its revenue, over EUR 3 billion, is made outside the country. Above all, the companies in this industry belong to the most innovative and successful businesses in the country. For example Ergoline, a company from Cerknica and regular exhibitor at electronica, is an important European developer of flexible and fixed printed circuit boards. It specializes in the boutique production of small series and prototypes, and closely cooperates with Slovenia’s leading scientific institution, the Jozef Stefan Institute.

Ergoline’s solutions are built into CERN’s legendary Large Haldron Collider. Slovenia’s biggest manufacturer of printed circuit boards (PCBs) is Intec TIV from Kranj. This company, with revenue of around EUR 10 million is owned by Ergoline. Another example of solution providers for the labs which break the frontiers of today’s physics also exhibited in Munich: Instrumentation Technology from Solkan near Nova Gorica develops beam stabilisation instruments for particle acceleration.

Slovenia’s electronics industry has always been well presented at leading innovation shows and trade fairs. For example electronica in Munich, Germany, the world’s leading trade fair for electronic components, systems and applications was a host to a number of companies in the printed circuit board development segment as well as manufacturers and companies developing components for the world’s top particle accelerators. This year 14 Slovenian companies will present their latest solutions at the world’s leading trade fair and conference for electronics – electronica.

Despite its size, Slovenia is the third EU country in the field of ecoinnovations, and has doubled its investment in sustainable development. Its socially responsible economy is among the best in the world in terms of environmental health and ecosystem vitality. Slovenia is a leading Central European country in patent registration and the 30th most innovative country globally. Slovenian companies’ R&D investment ranks high above EU-27 average, resulting in technologically advanced products and solutions best suited to the needs of the future.

This is part of the Slovenian strategy to ensure that its solutions are globally competitive. Slovenia also exports sustainable and innovative solutions for the European automotive industry. And moreover, the country was placed 5th by OECD for smart products delivered daily by the Slovenian digital and robot-intensive economy.