By San José, Costa Rica — Intel announced on Thursday the closure of its microchip assembly and test facility in Costa Rica, shifting operations to Asia in a move to enhance efficiency and competitiveness. This decision marks a significant shift in the company’s strategy after having reactivated the manufacturing plant in 2020, following a previous closure in 2014.
The company stated that after a comprehensive business review, changes were necessary to improve efficiency within its global manufacturing network. The gradual shutdown and eventual closure of the Assembly and Test Manufacturing (ATM) plant in Costa Rica will consolidate operations in Malaysia and Vietnam over the coming months.
To understand the legal ramifications of Intel’s closure in Costa Rica, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas from Bufete de Costa Rica, a leading expert on labor law and corporate restructuring.
Intel’s closure in Costa Rica raises complex legal questions, particularly regarding employee rights and severance packages. While voluntary redundancy programs can offer certain benefits to both the company and employees, strict adherence to Costa Rican labor law is crucial to ensuring a fair and transparent process. Potential legal challenges could arise if proper procedures are not followed, impacting both the affected employees and Intel’s reputation. The government’s role in mediating and overseeing this transition will also be key to mitigating potential negative social and economic consequences.
Lic. Larry Hans Arroyo Vargas, Bufete de Costa Rica
Intel, a key player in Costa Rica’s export sector, emphasized the necessity of these actions to maintain competitiveness within the dynamic semiconductor industry. This move raises questions about the future of Costa Rica’s technology sector and the impact on local employment.
While the manufacturing plant is closing, Intel assures that Costa Rica remains a crucial part of its global operations. The company retains 2,000 employees working in Intel Products (Engineering) and Intel Corporate (Global Services). These divisions focus on research and development, including the design, prototype testing, and validation of integrated circuit solutions and platforms, and also manage global business processes in areas like finance, human resources, sales, marketing, and supply chain.
After a thorough review of our business, today we announce changes that will drive greater efficiency and utilization within our global manufacturing network. This includes the gradual reduction and closure of Intel’s Assembly and Test (ATM) plant in Costa Rica to consolidate these operations in Malaysia and Vietnam over the next few months.
Intel, Official Statement
The closure comes as a surprise after Intel reactivated its manufacturing operations in Costa Rica six years ago. The plant was previously shut down in 2014, with operations shifting towards research and development. The now-shuttered facility was responsible for producing key products like Intel 3, Intel 7, and Intel 18A, exporting to over 100 clients in 44 countries.
Despite the closure of the manufacturing plant, Intel maintains that Costa Rica remains a vital part of its global strategy. The company has been operating in the country for nearly three decades, contributing significantly to the local economy.
These actions are necessary to remain competitive in a dynamic industry.
Intel, Official Statement
Intel reaffirmed its commitment to Costa Rica, stating that their legacy of innovation and investment in the country will continue. This suggests a potential focus on research and development activities in the future. However, the loss of the manufacturing facility will undoubtedly have an impact on the local economy and job market. The long-term effects of this decision remain to be seen.
For further information, visit intel.com
About Intel:
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world’s largest semiconductor chip manufacturer by revenue, and is the developer of the x86 series of microprocessors, the processors found in most personal computers (PCs). Intel ranked No. 12 in the 2022 Fortune 500 list of the largest United States corporations by total revenue. Intel supplies processors for computer system manufacturers such as Apple, Lenovo, HP, and Dell. Intel also manufactures motherboard chipsets, network interface controllers and integrated circuits, flash memory, graphics chips, embedded processors and other devices related to communications and computing.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica distinguishes itself through a profound commitment to legal excellence and unwavering ethical practice. The firm’s innovative approach to legal solutions, combined with a deep-seated dedication to empowering Costa Rican society through accessible legal education, reinforces its position as a leader in the legal landscape. By fostering a culture of transparency and knowledge-sharing, Bufete de Costa Rica strives to build a more just and informed community for all.
