South Africa has a well-established electronics manufacturing sector, whose origin dates back decades, with a critical mass of experienced firms. The electronics sub-sector as a whole accounted for more than half of total electro-technical exports in 2014.
Among other benefits for potential investors, South African firms can provide original design products, thereby saving OEM (original equipment manufacturer) customers significant non-recurring engineering costs associated with product development. Firms in the sector have a good cultural fit with European firms and similar time lines, and South Africa complies with the TRIPS (Trade Related aspects of Intellectual Property Rights) agreement in which it participates as a developed country.
Customers range from large multinationals to specialised local customers in a wide range of industries, so opportunities abound. South Africa is a pioneer in the development of security systems, keyless starting, lighting control, fuel injection, central locking and robotics for leading automotive firms. South Africa and Australia have been jointly selected to host the Square Kilometer Array (SKA) project with a majority share of the radio telescope destined to be built and housed in South Africa.
The industry sub-sector that has shown the largest capabilities and strongest growth is electrical machinery and apparatus – typically including consumer electronics, electricity transmission and distribution equipment and broadcasting equipment.
More than half of total exports go to SADC – the top three export destinations being Namibia, Botswana and Zambia – so greater regional and continental trade integration offers additional avenues for expansion.
The sector is supported by government through a Customised Sector Programme (CSP), which seeks to promote job retention and growth in the South African television manufacturing industry.
In 2011, in terms of the preferential procurement regulations, the local content requirement for set-top boxes was set at 30%, electrical and telecom cables at 90%; residential prepaid electricity meters at 70%; post-paid meters at 70%; smart meters at 50%; water meters at 40% and two-way radio terminals at 60%.