Illustration by Armine Shahbazyan.
Soviet Armenia was known as the Silicon Valley of the USSR because of its engineering potential. The achievements of Armenian scientists (from the invention of color television to the ATM, the automatic transmission box to the coffee vending machine), touch the daily lives of people around the world. That tradition continues in Armenia today, as it has become a thriving center for start-ups tinkering with new ideas.
Usually, Armenian software companies get more of the limelight because there are more of them. But hardware companies are also making great strides and making a mark on the global market.
Expper Technologies and YEA Engineering shared their views on the present and future of Armenia’s hardware ecosystem.
Engineering City: The Potential of Armenian Engineering Thought in One Place
The Engineering City—a public-private partnership project—is continuing to expand in Yerevan’s Nor Nork suburb. It is being implemented with the cooperation and support of the Enterprise Incubator Foundation (EIF), the Government of Armenia, the World Bank, the Ministry of High-Tech Industry, and private sector companies.
According to the project’s coordinator, Marina Minasyan, the goal of the Engineering City is to unite IT companies and engineering companies in one place, to gather engineering talent, and help position Armenia as a regional engineering center.
Currently, there are about 20 companies operating in the Engineering City in dynamically evolving industries such as automotive, 5G wireless communication, semiconductors and microelectronics, industrial IoT, radio-electronic systems and devices, and more.
Engineering City gives companies and specialists a broader range of means to operate more efficiently. There is an innovative element in every product.
The entire Research-Design-Testing-Production pipeline is represented to proudly carry the “Made in Armenia” label.
“In the field of information technology, you basically need to have a computer, a software package and Internet access, and you can quickly create a product. That is not the case in engineering,” shares Minasyan. “In order to implement your ideas, you also need high precision equipment, machines and tools, which are expensive and can be inaccessible for start-up companies.”
Engineering City allows companies to share use of expensive equipment, along with the skills and experience of their people. Perhaps five or six companies might cooperate to carry out a project.
“According to a government decision, certain companies can acquire free land in the Engineering City to build their own company building. Companies that are not yet at that stage will soon be able to rent an office at the Business Accelerator and work among fellow engineers,” says Minasyan.
The Electronic Devices & Measurement Systems group—a department within the Institute of Information & Communication Technologies and Electronics of the National Polytechnic University—is located in Engineering City. The professional courses, laboratory and research work of the educational programs implemented by the department are conducted at Engineering City and with the companies located there.
The Child-Friendly Robot That Was Created in Armenia
On January 20, 2022, the team behind Robin the Robot—the first Armenian artificial intelligence robot—announced that they had raised $2 million in seed financing, co-led by Starta VC with its co-investing platform Liqvest and Formula VC. Created by Expper Technologies, Robin had appeared in Time magazine’s 100 Best Inventions of 2021 ranking a few months earlier, finding its place among global inventions that make the world better, smarter and more fun.
Robin, whose mission is to help children being treated in hospitals cope with stress as they undergo treatment, is designed and manufactured entirely in Armenia—its electronics, boards, body and programming. Only the robot’s processor is imported; co-founder of Expper Technologies Karen Khachikyan explains that it would be prohibitively expensive to produce that component locally compared to the cost of importing it.
The story of the Armenian-born robot begins in 2018, when two friends, Hayk Khorasanjyan and Karen Khachikyan, created the first Robin Robot on their own after many late nights. Robin differs from other artificial intelligence robots in that it expresses and emits emotions while communicating with a child, creating an emotional connection with them. The robot helps children in recovery by brightening up their hospital routine.
Today, there are 15 robots working diligently in hospitals in Armenia and the United States. “In general, there was skepticism regarding our project to create a robot. People did not believe that it was possible to create such a complex product in Armenia. We believed from the very beginning that we would succeed, and we worked day and night to bring our idea to life,” says Khachikyan.
In the beginning, participation in the Armenia Start-up Academy pre-acceleration program (within the framework of which the selected Start-ups developed their product over 12 weeks, with the help of mentors) helped them a great deal. Afterwards, the Expper Technologies team traveled to the United States to build connections. The company has also received grants from the Innovation Matching Grant (IMG) and Science and Technology Entrepreneurship Program (STEP) implemented by the Enterprise Incubator Foundation.
“When the prototype of our robot was ready, SmartGateVC[1] decided to invest in our project in December 2019. It was one of the most important days for us, as we had found people who believed in us from a business point of view, even though it was not yet clear what the robot would ultimately look like and what its purpose would be,” says Karen.
Although the robot was previously sold to the service sector, on receiving the funding, the Expper Technologies team decided to pivot to the healthcare sector, focusing on the care of children and seniors.
“This was an important goal. We conducted a study that gave fantastic results. Indeed, Robin was helping children in hospitals. That was also a very important moment for us: seeing that what we had believed in really works,” recalls Karen.
The Expper Technologies team was on its way to closing its first investment cycle when challenging times began. In March 2020, the uncertainty around COVID-19 led to a lot of panic, and the investment field shut down for an extended period. Then, the 2020 Artsakh War broke out.
However, even under these difficult conditions, Robin was moving forward and making new friends. During the most severe period of the pandemic, the robot arrived at UCLA Mattel Children’s Hospital, one of the largest in the United States. Later, three robots were installed at ABC Kids Dental Group. U.S. media started to write about Robin, emphasizing that it was created in Armenia.
Challenges of Working in Hardware
In Armenia, the most important factor in this field is to solve a problem, regardless of whether the solution is a physical product or not. Khachikyan notes that it is easier to progress in the field of software in Armenia; however, opportunities on the hardware end should not be discounted, as the team at Expper Technologies has proven. Challenges in the field of hardware in Armenia include its cost and shortage of resources and knowledge, but Khachikyan understands the risks and is confident about overcoming them.
Robin’s 2022 Baby Boom
For 2022, Expper Technologies is focusing both on sales in the United States and continuing to improve production, distribution and customer service, especially as their numbers begin to balloon. About 40 new robots will be “born” this year, an ambitious target for the company at its current stage.
“Currently we produce four robots a month. We are also working to double that number on a monthly basis. Our production process is such that, if need be, we can increase the volume very quickly,” he says. The company’s staff, spread across five different countries, is expected to double in 2022, as new engineers, programmers, marketing and sales specialists join the team.
YEA Engineering: From Design to Manufacturing in Armenia
Armenia-based YEA Engineering provides services from design to manufacturing in rapidly-evolving industries such as automotive engineering, wireless communication systems, high frequency systems, testing semiconductor devices and equipment, electronics and microelectronics. On the education front, they provide laboratory stands used in schools, colleges and universities to reinforce theoretical knowledge through practical work.
The company is located in Engineering City, where it has its own workshop intended for serial production in small batches. According to the company’s business development specialist Vigen Hovhannisyan, the design and manufacturing stages are organized in Armenia, with necessary components procured from abroad.
Hovhannisyan also shares that hardware companies in Armenia require more resources, in terms of equipment, space and personnel, than software companies. That explains why software companies tend to be more numerous.
Putting in the Time
According to Hovhannisyan, it is very difficult to motivate advanced students to pursue a career in hardware. Less time and resources are needed to become a programmer than a hardware specialist.
“A few months are not sufficient to become an engineer. Fundamental knowledge is needed; students need to spend three to four years to acquire that,” he stresses.
They are trying to solve this problem at Engineering City. For this purpose, an Electronic Devices & Measurement Systems Chair was created as a department within the Institute of Information & Communication Technologies and Electronics of the National Polytechnic University. It is located in Engineering City. Well-known specialists in the field teach here, and the students of the department are involved in various projects with Engineering City-based companies, thus gaining practical knowledge that is not available in the classroom.
“In order to develop the sphere, it is necessary to have a high-quality university serving the field; we must develop the Polytechnic [University]. There is no other option,” emphasizes Hovhannisyan.
According to him, Armenia needs to restore its reputation as a high-tech country—a reputation that existed during the Soviet era when Armenia had a high-tech industry that serviced the needs of the entire union.
Most of YEA Engineering’s products are exported. They tend to be tailored more to the industrial sector than the direct consumer.
“For example, we manufacture transistor testers, which are used by transistor manufacturing companies. Unfortunately, manufacturing in Armenia is not at the desired level yet, and such products are not consumed in our country. Let’s hope that the need for these products will be felt in Armenia in the near future, and a certain percentage of our products, at least more than 1%, will be consumed in the homeland,” says Hovhannisyan.
He also adds that there are artificially-created difficulties in Armenia, related to the import and export process, which have a real impact on the sector.
In the future, YEA Engineering plans to attract more orders from abroad, which will allow for exporting a large number of products, creating new jobs and developing new personnel.
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Thus, a lot of resources are needed to develop the field of hardware; this means more finances and time. The more complex the solution, the more money it takes to start creating it.
Here, the risk of failure is greater than in the software field. That’s why investors select companies they want to develop with caution.
There is a need to strengthen resources and skill sets, as well as foster the desire to learn. That is why the big hardware companies and universities operating in Armenia must inspire and educate new specialists through various programs themselves, realizing that this is a prerequisite to spawning new companies in this field.
