Solar panel production and semiconductors have become the investment priorities of the Hungarian government.
Cash grants, development aid and tax breaks more favorable than traditional incentives will be available to companies investing in production in these sectors, said Agnes Henter, head of project management at the ITD, Hungary’s investment promotion agency in Budapest.
Hungary also has European Union funding to help meet renewable energy targets set by Brussels.
Hungary so far has limited solar production. Japan’s Sanyo started making solar panels in 2005 in the city of Dorog. This year, Sanyo plans to triple capacity and produce 720,000 solar panels annually, according to the ITD. The plant is then expected to become Sanyo’s largest solar panel facility in Europe.
Two domestic companies, HelioGrid and Genesis Energy, are also building solar panel plants.
Domestically, Hungary has virtually zero installed solar panels and the state is expected to provide home and business owners incentives to promote widespread adoption.
In the semiconductor area, commercial production is limited to Infineon Technologies’ relatively small bipolar semiconductor assembly-and-test facility.
However, the education system has some orientation toward semiconductors. The Hungarian Academy of Sciences, for example, has a microelectronics department that does research into semiconductor structures and related processes.
“We believe we can get more investments in this area,” Henter said.
Hungary’s total FDI last year was 4B euros ($6.1B) and the ITD expects about the same this year.
The country is the largest exporter of electronics in CEE, accounting for 40 percent of regional output, according to the ITD. Flextronics, General Electric and Elcoteq are the three largest companies in the sector, together employing 33,000. Henter said the country as a whole is not facing a skilled labor shortage. While Budapest may have fewer specialists available, regions in Hungary’s south and northeast have high unemployment rates.
“These regions have a labor force waiting for investments,” she said.
