|                                                                                                                                                             |  | ARMENIA'S ELECTRONICS INDUSTRY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|**BISNISHome PageSearchBISNISEmbassyReportsCountryReportsIndustryReportsPublicationsSourcesof FinanceLeadsand EventsExchangeRatesState ExportsOtherSources** |  | November 1997by Karen RubeizA recent report issued by the U.S. Embassy in Yerevan examines the once-thriving Armenian
electronics industry and offers prospects for U.S. company investment in this sector. Prior to the
dissolution of the Soviet Union in 1991, Armenia supplied nearly 30 percent of high-tech
computer and electronics equipment and parts for the Soviet defense and space systems.Today, most Armenian plants utilize only 10 to 15 percent of capacity, having lost markets and
supply links with former Soviet states.  Many are no longer capable of producing competitive
products for export markets on their own.  However, the Mars State Enterprise and Ashtarak
Semiconductor Plant are rare exceptions.  These two firms, built and equipped in the late 1980s
with assistance from British firms, offer the best opportunities in Armenia for semiconductor chips
and production of other electronic components, as well as for assembly of consumer or industrial
electrical and electronic devices.Mars was built in 1988 by British contractors for the production of sophisticated electronic
devices including printed circuit boards and integrated circuits. Investment in the plant's advanced
Western equipment and CAD/CAM systems totals $200 million.    Mars offers an excellent
investment opportunity for production of a variety of products, including personal computers,
auto electronics, and household appliances.Ashtarak Semiconductor Plant was established in 1986 within the Transistor R&D Company. 
The plant offers opportunities for semiconductor packaging/assembly and manufacturing of a
variety of electronics, including semiconductor wafers, circuit boards, and solar cells.  In order for
the plant to become completely operational, an estimated $15-20 million may be required from a
U.S. investor.  Transistor R&D is actively seeking a partner willing to make the final investment
against either a bond issue or in return for equity and profit sharing.In 1997, the Government of Armenia offered a number of plants for sale by international
tender.  The bidding process, which is being handled by Merril Lynch out of London, is still open
for many of these, including the Mars plant.  For more information on Mars, Ashtarak, and
other Armenian electronics enterprises, please consult the Armenia section on BISNIS Online,
at http://www. mac.doc.gov/bisnis/country/caucasus.htm.  For information on bid procedures,
contact Merril Lynch Mergers and Acquisitions, tel. 44-171-867-4252, fax 44-171-573-0626. 
Contacts: Daniel Herrero or Eric Swimmer.Karen Rubeiz covers Armenia for BISNIS.This report is provided courtesy of the Business Information Service for the Newly
Independent States (BISNIS)