Download - The Israel High Tech Industry
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The Israel High Tech Industry
Elisha YanaySr. VP Motorola IncGM Motorola Israel
former Chairman Israel Association of Electronics and Software Industries (IAESI)
NOV 26 2008
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ISRAEL• Population: 7.3 M • Households: 1.8 M • Urban Population: 91.5% • Area - grand total 22,145 sq. km • GDP(ppp): US $ ~$195,308m • GDP Per Capita: US $ K$31,767
• Unemployment 6.8% • Fixed line Telephone Subs – 2.9M • Mobile – 7.7M (106% penetration) • Internet Users: 2.5M (BB): 1.5M)
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5,48
02,
320
6,70
02,
280
8,05
02,
330
9,13
02,
400
13,0
002,
500
12,2
502,
500
10,7
402,
300
10,8
702,
300
13,4
002,
400
14,2
002,
500
16,0
002,
700
17,7
002,
900
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Sales
Export
ISRAEL ELECTRONICS & SOFTWARE INDUSTRIES SALES & EXPORT (M$)
$40Bn
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Aerospace & Defence
IndustrialConsumer
CommunicationsComputer Hardware
Security Applications
Semiconductor Transport
Aftercare
Medical
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ISRAEL ELECTRONICS & INFORMATION INDUSTRIES2007 - 20,700 M$ISRAEL ELECTRONICS & INFORMATION INDUSTRIES2007 - 20,700 M$
Civilian Comm. & Telecomm.
Components
IndustrialEquipment
22.9%
13.4%17.8%
13.4%
DefenseSystems
23.7%Software
8.8%
MedicalSystems
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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 Networks Storage Area Networks Wireless Local Loop, Microwave VPN, Firewalls WiMAX Video-Compression, Video-Conferencing & Video Networks
TELECOMMUNICATIONS EQUIPMENTTELECOMMUNICATIONS EQUIPMENT
23%
CHECKPOINTSCOPUS
OPTIBASEZORANTELRAD
ECITADIRAN
RADGILAT
MOTOROLAALVARION
etc..
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Missiles and Guided Weapons Anti Aircraft and Anti-Missiles Systems Radars - Airborne, Naval, Ground EW Equipment Fire Control Systems Command, Control, Communications and Intelligence Systems Avionic Equipment Platforms (Aircraft, Tanks…) Retrofit and Upgrading Navigation and Positioning Equipment Tactical Airborne, Naval and Ground Communications Sights and Night Vision Simulation and Training Equipment
MAJOR MILITARY SYSTEMSMAJOR MILITARY SYSTEMS
13.7%
ELBITIAI
ELTAELISRAMAGAL
NICETADIRANRAFAEL
AERONAUTICSBVR
etc,…
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Computerized Production Equipment
Computerized Control Systems
Test Equipment
Training and Education Systems
Consumer Products
Security Equipment
MAJOR INDUSTRIAL EQUIPMENTMAJOR INDUSTRIAL EQUIPMENT
13..4%
Kodak-CREODegem
MER GroupLIPMAN-Verisign
M-SystemsNDS
ORBOTECHRAPAK
VISONICCROW
KP electronicsMotorola
Magaletc…
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Imaging and Diagnostic Equipment
Surgical and Treatment Equipment
Monitoring Systems
MAJOR MEDICAL EQUIPMENTMAJOR MEDICAL EQUIPMENT
8,8%
ELRONGiven Imaging
LumenisPhilips
CADENTBioViewAlgotec
GERimedOridionetc…
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SEMICONDUCTORS 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
ELECTRONIC COMPONENTSELECTRONIC COMPONENTS
13,4 %
EltekNDS
VishayIntel
FreescaleTexas Instrument
ZoranDSP group
Analog Devicesetc..
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INTERNET
MULTIMEDIA
SOFTWARE – PRODUCTS
SOFTWARE – TURNKEY PROJECTS
SOFTWARE - SUBCONTRACTING
SOFTWARESOFTWARE
23.7%
AudioCodesBVR
CyOpticsECI
CheckpointIBM
FormulaRadware
ComverseAmdocs
etc..
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ISRAEL ELECTRONICS & INFORMATION INDUSTRIES 2006 - 18,700 M$ISRAEL ELECTRONICS & INFORMATION INDUSTRIES 2006 - 18,700 M$
36% 39%
5% 20%
ROW
ASIA
USAEUROPE
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$11B
2003
2003
$2,7T
$8,6T
2017
2017
We have the human resources necessary
$40B
2003 2017
X2
X2 ??
The new challenge to 2010
The Challenge
2007
$21B
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Academic Year
Number of 1st Year Students
Number of Graduates
Retraining Total % of Universities
1st Year Students
% of Colleges 1st
Year Students
Until 1994
1,200 1,000 100% 0%
1998 4,860 2,280 3,905 6,185 73% 27%
1999 5,800 2,500 4,870 7,370 62% 38%
2000 6,653 4,040 5,238 9,278 54% 46%
2001 8,030 4,300 3,970 8,270 45% 55%
2002 8,000 5,000 3,475 8,475
2006++ 8,000++ ~8,00021,458
46% 54%
HIGHER EDUCATION IN ISRAELELECTRICAL & COMPUTER ENGINEERING & COMPUTER
SCIENCES
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Engineers graduates per year in 2006
•Israel 8000 engineers /year (pop 7.2M) 0.11%•France 30 000 engineers/year, (pop 64M) 0.046%•UK 25 000 engineers/year (pop 60M) 0.04%•USA 74 000 engineers/ year (pop 300M) 0.024%•China 600 000 engineers/year (pop 1.3Bn) 0.0046%•India 400 000 engineers/year (pop 1.1Bn) 0.036%•Japan 90 000 engineers/year (pop 127M) 0.07%
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Foreign Investments in Israel
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Foreign Investment in Israel 2006/7
4,000$M
800$M
300$M
150$M
150$M
140$M
90$M
4,500$M
1,500$M
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Foreign Investment in Israel 2006/7
90$M
76$M
Med Impuls50$M
40$M
12$M
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245$M
54$M
100$M
75$M
Foreign Investment in Israel 2006/7
50$M
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Largest Recent M&A Transactions Of Israeli Companies
Israel continues to attract leading US corporations, looking for established small/mid-cap companies with superior technology and a niche market.
(1) Transaction size and multiples include target company cash and debt when avaialble.(2) Adjusted Revenue multiples based on TTM value.Sources include Jefferies Broadview estimates, IVC Resource Center, Capital IQ and selected press releases.
Adjusted AdjustedDate Transaction Revenue
Announced Target Name Buyer Business Description Size ($m)(1) Multiple(1,2)
7/25/2006 Mercury Interactive HP Business technology optimization solutions $4,500.0 5.7x5/5/2006 Iscar Berkshire Hathaway Precision carbide metal working tool provider 2,500.0 2.8x
7/31/2006 M-Systems SanDisk Corp. Data storage products 1,550.0 1.9x3/17/2005 Agis Industries Perrigo Generic pharmaceutical product provider 818.0 2.2x
4/10/2006 Lipman Electronic Engineering VeriFone Holdings Online payment solutions 660.5
2.8x7/18/2006 Cramer Systems Group Amdocs Operational support systems software 375.0 3.8x4/4/2006 Passave PMC Sierra System-on-a-chip solutions 300.0 N.A.
4/18/2006 Qpass Amdocs Digital commerce software 275.0 6.5x12/21/2006 Disc-O-Tech Medical Technologies Kyphon Developer, manufacturer and marketer of implatable devices 240.0 N.A.8/11/2005 Scitex Vision HP Wide-format printer manufacturers 230.0 1.6x1/13/2005 Verisity Cadence Provides software used to verify electronic system designs 229.0 4.4x
1/4/2005 Tecnomatix Technologies UGS Manufacturer of process management software 212.8 1.9x4/28/2006 Tekelec (IEX Corp) NICE Systems Workforce and performance management software 200.0 N.A.10/24/2006 PowerDSine Microsemi Integrated circuit provider for ethernet power implentation 182.8 5.4x4/10/2006 NetCentrex Comverse Technology Inc Voice and video telecommunication solutions 167.0 3.3x11/8/2006 Topio Network Appliance Software developer for enterprise application 160.0 53.3x7/11/2006 ColBar LifeScience Johnson & Johnson Biosurgical products 159.0 N.A.5/9/2006 Kashya EMC Enterprise data protection solutions 153.0 N.A.
3/27/2006 Identify Software BMC Software Problem resolution application software 150.0 6.0x3/17/2006 Sightline Technologies Stryker Corp. Endoscopic solutions 150.0 N.A.2/9/2005 Modem Art Agere Systems Developer of system-on-a-chip solutions 145.1 N.A.
12/5/2005 Cyota RSA Online security provider 145.0 12.6x11/28/2006 FolloWap Neustar Communications software for network operators 139.0 5.6x9/26/2006 Gteko Technologies Microsoft IT and enterprise software 110.0 6.1x7/26/2005 Sheer Networks Cisco Systems Intelligent network and services provider 109.5 N.A.1/9/2006 Systinet Mercury Interactive Corp. Application software 105.0 N.A.
7/12/2006 Uri-Dent Denstsply International Dental crowns providers 100.0 N.A.2/25/2005 Oplus Technologies Intel A fabless semiconductor company 100.0 N.A.
2/12/2007 Witness Systems Verint Systems Workforce optimization software provider 781.8 3.8x
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Total $15Bn
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Major Multinational Companies with a Design Center in Israel
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Some of Israel’s Visible Companies
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FOREIGN ELECTRONIC SUBSIDIARIES IN ISRAEL (PARTIAL LIST)
FOREIGN ELECTRONIC SUBSIDIARIES IN ISRAEL (PARTIAL LIST)
Intel * Microsoft IBM Sun Microsystems Cisco 3 Com HP* Texas Instruments* National S.C ST Microelectronics Infineon Analog Devices Vishay* AVX (Kyocera) General Electric Philips MedicalFlextronics*
Motorola* Lucent Technologies Avaya Nortel* Siemens Alcatel Philips Ericsson Nokia ADC Qualcomm Applied Materials KLA - Tencor Kulicke & Soffa* BAE Systems Ind. AstronauticsSanmina-SCI*
Berkshire Alcatel Lucent Verifone*Kodak* Nortel SanDisk EMC Stryker TA associates Google Xerox Sun CA Microsemi AMS PricerEPIXEtc…
* Design & MFG
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Asked how come he chose Israel as his first investment outside America, Buffett's response was:
"Some Americans came looking for oil, so they didn't stop in Israel.
We came looking for brains, so we did stop in Israel."
$4.1 billion !
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CRAIG BART: former Intel CEO ( visiting Israel )
• “Apart from the 6,000 jobs that we have provided here, in my opinion the contribution to Israel lies in the fact that Intel has attracted other companies to invest in Israel and to create an entrepreneurial environment. Globally speaking, Israel is in 3rd place in terms of IP and is a very good place for opening businesses. The level of education in Israel has helped us expand. Israel’s ability to supply very good scientists has helped us, and the government’s positive attitude has helped us attract investments.”
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Ed Zander, Motorola CEO, visit to Israel
• -----Original Message-----From: Zander Ed-AEZ111 Sent: Sunday, November 14, 2004 10:57 PMTo: Yanay Elisha-BCMS54; Nottenburg Richard-arn021Cc: Brown Greg-CGB025Subject: RE: Your visit to Israel
Elisha- I had a great time. You and your team did an outstanding job. I was continually impressed by their knowledge of the business, opportunities and issues and great work ethic. Motorola has a jewel in it it's Israeli operation thanks to you and your senior team. Hope to see you soon. Regards, ed
• [email protected] 847-576-3000
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Bill Gates, Microsoft CEO, made his first trek to Israel
“Considering the density of Israeli start-ups and local successes, Israel is like a bit of Silicon Valley.
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"There are some fabulous, extraordinary success stories of technology
companies here in Israel.”• Ellison had specific advice for Israeli firms, saying that
the country’s technology sector has matured to the point that it needs to begin looking to cheaper sources of research services.
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• Great talent driving Israel ’s success
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Israel Is The Leader Among Non US Countries Listed on NASDAQ
Number of Companies Listed on NASDAQ
71
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9
8
8
7
6
5
3
2
2Germany
Taiwan
India
S. Korea
France
Singapore
Japan
Hong Kong
Netherlands
U.K.
Canada
Israel
0 10 20 30 40 50 60 70 80
Recent Israeli
NASDAQ IPOs
Source: NASDAQ as of September 2007.
Israel maintains the largest number of companies on NASDAQ
Among these countries, Israeli companies accounted for 40% of IPOs on NASDAQ in 2006.
Technology remains the dominant segment
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33(2006)
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What do we need to continue our success?
• Excel in our education – aspire to being the best in the world
• Keep raising the bar in education• Teach innovation and creativity• Strengthen partnerships between academia and industry• Support sophisticated, small ( 20-50 $M) industries – if
you want to be large, gather together many small…• Government support should match or even exceed other
countries’ incentive plans• $ - Shekel challenge• Keep pushing!