Announcing new investments in Ohio to build a more balanced supply chain and create a new epicenter for advanced chipmaking that will bolster Intel’s domestic lab-to-fab pipeline and strengthen Ohio’s leadership in research and high tech. #IntelOhio
— Intel (@intel) January 21, 2022
Intel has been operating in Costa Rica for 26 years, becoming an important source of investment and employment for the Central American country. It has a major site in the city of Heredia, barely a 40-minute drive from the country’s capital city (San Jose). The site includes assembly and testing facilities, an R&D center and an office for global services delivery.
Intel claims to have over 3,000 collaborators in Costa Rica, generating “opportunities for nearly 5,000 contractors”. In spite of making no announcement for an expansion in its staff, the company has several IT-related job openings in the country, including positions for software developers, cloud engineers, data analysts and DevOps engineers. Some of these positions are aimed at “student-workers”, including an opening for high school interns in assembly and operations test projects.
A Promise of Major Transformation
Intel’s US$1.2 billion investment heralds a major impact for Costa Rica’s manufacturing and tech sectors. President Chaves met US President Biden in the White House just a day before the announcement, discussing plans to turn Costa Rica into a regional node for the supply of semiconductors. That meeting was explicitly mentioned in Intel’s press release.
In mid-July, the US State Department announced a partnership with the government of Costa Rica to “explore opportunities” to diversify the semiconductors supply chain, an objective which falls under the CHIPS Act of 2022.
The United States and Costa Rica are not only united by the challenges we face – we’re united by the vision we share.
A vision for a future of greater opportunity, freedom, equality, and dignity for all of our people. pic.twitter.com/MyYAVrJcsL
— President Biden (@POTUS) August 31, 2023
The CHIPS Act provides the State Department with a US$500 million fund (known as ITSI) for “coordinating with foreign government partners to support international ICT security and semiconductor supply chain activities”.
The coordinating activities include: the securing of raw materials, identifying workforce and infrastructure needs, developing “complementary approaches” to industry incentives and coordinating policies to shield operations from security risks.
Waves in the Services Sector?
It is likely that the US$1.2 billion commitment will have a major impact on tech manufacturing, but there are mixed perceptions on whether the investment will have an effect on IT services.
Some of the market sources consulted by NSAM expect little to no impact in Costa Rica’s IT services sector, while others see the wave of investment having an indirect though significant effect on the national tech ecosystem.
Mario Chaves –President of Encora in the Americas– applauded the announcement, mentioning that a wave of incentives and attention could push Costa Rica’s overall tech sector (hardware and software) forward. Yet he doubts that IT service providers will see those benefits.
“That will have direct benefits for everyone [in Costa Rica], but not so much for the services sector,” Chaves commented. “The skills required by Intel for this new project don’t match the ones needed in our industry.”
“There could be a negative effect in the short term if demand for talent increases suddenly, leading to engineers and technicians asking for higher pay because of Intel’s salary benchmarks. That would be temporary, though,” he added.
“That will have direct benefits for everyone [in Costa Rica], but not so much for the services sector”—Mario Chaves, President of Encora in the Americas
Marcos Santos, CEO in the Americas for GFT Group, sees Intel’s investment as a catalyst for the local tech sector.
“Intel’s investment will trigger a chain reaction of recurring investments into local IT businesses to support the company’s new manufacturing and production needs,” Santos said. “There will be an ongoing need for more talent to support the new Assembly and Test plant and Intel’s larger semiconductor production needs, resulting in increased IT job opportunities for the local Costa Rican market.”
The interest in Costa Rica’s potential for semiconductors mirrors that of Mexico. Mexican and US authorities have spent the past couple of years aiming to incorporate Mexico into the regional semiconductors supply chain.
The project is already making waves in several Mexican states, attracting interest from foreign tech vendors and pushing local authorities to redesign whole segments of their economies. Jalisco’s government launched the Jalisco Tech Hub Act, which will begin implementation this year.
Based on the information provided by Intel through its press release and the answers to our queries, it seems that the US$1.2 billion investment, as big as it is, won’t change much of the company’s current operations in Costa Rica. For all the optimism that surrounds it, the announcement comes off more as a statement of trust and commitment to the country than a transformative project.
The US’ plans to incorporate several Latin American countries into the semiconductors supply chain has been talked-up by businessmen and politicians as a potentially transformative moment for developing economies in the region, which have struggled historically to catch up to the technological leaps of global titans. It remains to be seen whether that promise will be achieved and to what extent.
Source link : https://nearshoreamericas.com/intel-is-unusually-vague-about-a-1-2-billion-investment-in-costa-rica/
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Publish date : 2023-10-03 11:33:48
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