Israel’s Largest Export Sector
Electronics represents Israel’s largest export sector with overseas sales of more than$15 billion per year, more than half of the country’s industrial (non-diamond) exports. Development of the most advanced technologies and high-tech know how and solutions also makes the electronics sector the country’s most profitable industry with a minimum added-value of 45%.Initially built around smart defense industries, multi-faceted commercial applications have been developed over the years in such areas as telecommunications, medical systems, industrial equipment and components. The majority of the more than 120 Israeli companies traded on the New York and European stock exchanges are in the fields of electronics and there are nearly 300 companies operating in this sector.
Israel’s electronics industry excels in developing systems and solutions for the following areas: microelectronics, communications, semiconductors, Internet applications, medical equipment, smart-cards, electro-optics, test equipment and measurement, industrial control, textiles, printing, agriculture, defense electronics, computerized and peripheral equipment, environmental diagnostic systems, safety and security systems and equipment, aviation and aerospace systems, IT and infrastructure.
Overall electronics sales have reached $18 billion a year. There are nearly 60,000 people directly employed in the electronics industry, including more than 25,000 engineers and scientists and 15,000 technicians of whom 16,000 are university graduates. Tens of thousands more professionals are employed on a sub-contracting basis. Sales per employee have grown from $63,380 per person in 1987 to nearly $300,000 per employee in 2006.
The depth and breadth of high value-added resources combined with Israel’s quality work force has attracted numerous international corporations seeking investments and strategic partnerships including Intel, Motorola, Microsoft, Computer Associates, IBM, Cisco Systems, Texas Instruments, HP, Johnson & Johnson, General Electric, Philips, Kodak and Siemens.
In the field of software development, Israel has merged as a major international power with a world-renowned reputation as a design center. And in start-ups, of which Israel has the largest concentration outside of the US, medical electronics, electro-optics and semiconductor equipment feature prominently as well as software.
Telecommunications, together with data communications and Internet applications, commands about 25% of Israel’s electronics industry.
Israel’s electronics industry developed due to the strategic need for defense and electronic warfare systems. The electronics industry in Israel particularly excels in inter-disciplinary areas and the ability to incorporate different industries and components through electronics.
The scope of activities in Israel’s electronics industry is extremely diverse. First and foremost Israeli companies have made the battlefield a smart arena with a range of electronic, digital and computerized electronic warfare systems ranging from intelligence and communications systems to unmanned air vehicles (UAVs). Today’s generals can use comprehensive leading edge intelligence data gathering systems developed in Israel and tested in real-time conditions to monitor the enemy’s movements and manage the dynamics of an ongoing battle.
Israel's defense industries are able to supply armed forces with equipment ranging from small VHF/FM radio sets and tactical radio transceivers to data link real time video, telemetry and command systems. C3 systems can assist ground forces by providing precise data, while C4I systems shorten firing time for artillery pieces. Laptop and hand held computers have been ruggedized for field applications and can be used for tactical data dissemination and command control capabilities in battle. In addition airborne and ground signal intelligence systems developed by Elta Systems Group, a subsidiary of Israel Aircraft Industries (IAI), deliver fast and accurate detection and interception of threats using complex algorithms and functioning in the densest electromagnetic environments. Indeed IAI has enabled Israel to develop the world’s first air-toair missile and become one of only eight countries with an independent space launch capability.
Elisra Electronics Systems has developed image transmission systems for wideband data, electrooptical and radar sensors as well as microwave and RF components, while Nice Systems produces integrated monitoring and digital recording solutions for COMINT intelligence systems applications. Rafael, Armament Development Authority, offers customized solutions and advanced combat systems, while Elbit Systems and its subsidiary El-Op also offer a wide range of technologically advanced defense systems.
In the commercial sector, Orbotech is a world leader in Automated Optical Inspection (AOI) systems. ECI Telecom provides innovative, managed network solutions, enabling clients to maximize infrastructure capacity and Gilat Satellite Networks designs and manufactures VSAT satellite earth stations and related equipment. DSP Communications, which has developed chips used in wireless and mobile phone communications was recently sold to Intel for $1.6 billion.
Other Israeli achievements include: contactless smart-card interface; ultra-thin chip-size packaging; innovative semiconductor equipment; the world’s smallest “on-board” fuse for FSL hard-disk drives; a vehicle collision avoidance system; an electronic alarm device for protecting phone and fax lines; ASIC and VLSI design and manufacture; in-situ control monitors for metrology applications in micro-electronics; commercial applications for spectral imaging and highly integrated low-cost FDDI controllers.
Backing up these successes, are Israel’s academic institutions, which are renowned worldwide for their high standards and ability to provide engineers with the latest technological training.
The typical Israeli high-tech electronics executive would not only have a university degree, but would have served as an officer in the Israel Defense Forces, acquiring the ability at a very young age to make real-time decisions under pressure. Another factor behind the success of this sector is the significantly high but carefully selective grants offered by the government through the OCS. And venture capital usually takes up where OCS seed money leaves off.
With the highly competitive global high-tech industry hungry for new ideas in such fields as mobile communications, Internet applications, medical devices and much more, Israel’s proven capabilities mean that this sector is enjoying a surge in demand.
Comprehensive Catalog of Israeli Companies