2006. thomas simonis. success factors in entering the romanian market: knowledge transfer as an...

Copyright © Infineon Technologies 2005. All rights reserved.Copyright © Infineon Technologies 2005. All rights reserved.

IFRO Thomas SimonisVelden Conference

September 2006Seite 1 In

fin

eon

Success Factors in Entering the Romanian Market:Knowledge Transfer as an Opportunity

Velden, 21.09.2006

DI Thomas SimonisManaging Director Infineon Technologies Romania



September 2006Seite 2

Infineon at a Glance

Infineon – the no. 4 semiconductor company worldwide

Revenues of Euro 6.8 billion in the fiscal year 2005 and 1.97 billion in the third quarter of fiscal year 2006

Approx. 41,100 employees (incl. 7,400 R&D staff) as of June 30, 2006

Strong technology portfolio with about 42,000 patents andapplications; more than 35 major R&D locations worldwide

Focus on automotive and industrial electronics, security and chip cards, communication and memory products via its affiliate Qimonda




Communication Solutions

Automotive, Industrial & Multimarket

Infineon – Business Groups

Memory Products

* a 100% subsidiary continuing the operations of the former MP

COMCOM

AIMAIM

*




Product RangeProduct Range

Pressure, temperature, hall sensors; RF ICs 8-bit, 16-bit, 32-bit TriCore® microcontrollers MOSFETs, IGBTs, voltage regulators,

transceivers, smart power, system ICs Power discretes, - modules, -stacks, - ICs AF and RF diodes and transistors; SSICs,

MMICs Chip card controllers and memories

(contactbased and contactless) Security ICs Customer specific solutions and design

Pressure, temperature, hall sensors; RF ICs 8-bit, 16-bit, 32-bit TriCore® microcontrollers MOSFETs, IGBTs, voltage regulators,

transceivers, smart power, system ICs Power discretes, - modules, -stacks, - ICs AF and RF diodes and transistors; SSICs,

MMICs Chip card controllers and memories

(contactbased and contactless) Security ICs Customer specific solutions and design

Market PositionsMarket Positions

No. 2 in Automotive ww, no. 1 in EU

No. 3 in RF Discretes

No. 1 in Power

No. 1 in Chip Card and Security ICs

Sources: Strategy Analytics (2005), iSuppli (2004), IMS (2005), Gartner Dataquest (2005)

No. 2 in Automotive ww, no. 1 in EU

No. 3 in RF Discretes

No. 1 in Power

No. 1 in Chip Card and Security ICs

Sources: Strategy Analytics (2005), iSuppli (2004), IMS (2005), Gartner Dataquest (2005)

Core competenciesCore competencies

Automotive, Industrial & Multimarket

Highest quality products and services Leading edge technology and IP portfolio System expertise with broad application

competence Strong worldwide presence with local sales

and R&D support Dedicated and committed account teams

and distributors

Highest quality products and services Leading edge technology and IP portfolio System expertise with broad application

competence Strong worldwide presence with local sales

and R&D support Dedicated and committed account teams

and distributors




Why Infineon Goes Bucharest - Keyfactors

VillachAustria

BucharestRomania

PaduaItaly

MunichGermany

GrazAustria

R&D network for power mixed

signal

Strengthens alliance of intelligent

power semiconductors

Proximitiy to customers

Surrounding infrastructure

Proximity to universities

Highly qualified engineers

Strong high-tech orientation among

authorities

Cost advantages




Infineon Romania Facts & Figures

Official annoncement in April 05: formation of Infineon Technologies Romania

June 05: Legal entity Infineon Technologies Romania & Co. SCS founded

Operations started in August 2005 with 19 employees

18. January 2006: Inauguration of the Development Center Bucharest

Today 120 employees

– 80 on site

– 40 abroad on training

R&D focus on

– Automotive Power

– Sense and Control

– Radio Frequency

– Chipcard

Thomas SimonisVelden Conference



Internal Success Factors for a new R&D Center

Clear definition of required competencies

– not to mention the low cost argument first

Convince and buy-in of internal customers

– guarantees the active support of involved persons and departments

Comprehensive location analysis

– ranking list of criteria, weight factors

Consulting and governmental relations by lobbyist

– door opener, lobbying

Professional and experienced project team

– HR, finance, purchasing, facilities, export control, IT

Delegates for management and knowledge transfer

– well connected to mother company, processes, technologies




Success Factors in Entering the Romanian Market

Pool of experienced, well educated people

– sufficient number of people with the required specialization

Close co-operation with technical universities

– Master studies, laboratory, interns, masters/ PhD thesis

Infrastructure

– good internet and phone supply, airport, public transport

Cultural proximity

– European country and culture

IP protection enforced

Regulatory proximity as far as laws are concerned




Challenges

Complicated visa procedure inbound and outbound

– Inbound: getting work- and residential permit takes more than 3 months

– Outbound: long process in some EU countries

Compensation package finding

– starting a new industry, right „price“ finding

– false expectations and unrealistic demands of candidates

Bureaucracy

– huge number of documents for simple processes

Customs

– very entertaining behaviour of customs staff

– long approval processes to get customs clearance

Frequently changing laws and regulations

– labour and tax laws, 2h per day to go through alterations




Lessons Learned: Logistics, IT

Must have reliable shipping company with good contacts to authorities/ customs

Invoices to be in Romanian language; otherwise, risk that goods are not being delivered

Approval needed for

– hardware and software for security applications (e.g. encryption)

– software tools used in all design processes

– all project, design, and technology data

Very good experience with Internet and telephone provider

– high flexibility in providing tailored solutions on short notice

IT personnel is well educated and experienced

– but seldom familiar with centralizes IT systems/ operations

Local hardware vendors try to ignore internationally agreed conditions with Infineon




Lessons Learned: Personnel, Service

To start up, a high quality local recruiter is essential

To reduce cost, quickly set up inhouse HR department

– comprehensive training on inhouse processes required

Clearly set rules and regulations – and that they are compulsory and not negotiable

Outbound delegates (trainees): logistics, accomodation, allowances must be well though-out

Service and support structures and service levels are not up to Austrian standards

– suppliers are happy with 80% solutions, do not reply

– craftsmen do not appear since they already work somwhere else for more




Knowledge Transfer as an Opportunity

Setting up a high-tech R&D center

Knowledge transfer through comprehensive training

– working in a solid international R&D network on an equal footing

Project responsibility, no extended workbench

– highly motivated teams, working on essential projects

Long term perspective

– further potential for expansion

– Competence Center

Opportunity for Romania

– starting a new high tech industry with future-proof work places

– will attract more high tech industry and create more jobs in other industries as well




Never stop thinking.