By San José, Costa Rica — Intel has announced the closure of its assembly and test manufacturing plant in Costa Rica, a move that has sent ripples through the nation’s technology sector and sparked renewed debate on the country’s competitiveness.
The closure, slated to occur gradually over the next few months, will consolidate Intel’s operations in Malaysia and Vietnam. While the company assures that Costa Rica will remain a crucial part of its global footprint with its research and development and global services centers, employing 2,000 people, the loss of the manufacturing plant is a significant blow.
For expert legal insight into the implications of Intel’s closure in Costa Rica, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, Attorney at Law from Bufete de Costa Rica.
The closure of Intel’s operations in Costa Rica presents a complex scenario with potential ramifications for both employees and the broader Costa Rican economy. While Intel’s severance packages must comply with Costa Rican labor law, the impact extends beyond individual compensation. Key considerations include the potential ripple effect on local suppliers and the overall impact on Costa Rica’s standing as a hub for high-tech investment. The government’s response, in terms of supporting affected workers and attracting new investment, will be crucial in mitigating the long-term consequences of this closure.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas rightly highlights the multifaceted nature of this closure, emphasizing the need for a comprehensive approach to address its ripple effects. The government’s role in navigating this transition, both in supporting displaced workers and fostering a climate conducive to future investment, will be critical for Costa Rica’s continued economic success. We thank Lic. Larry Hans Arroyo Vargas for his valuable insights into this complex situation.
Costa Rican President Rodrigo Chaves acknowledged the impact of the closure, attributing it to global adjustments within Intel. However, he also conceded the need for improvements in Costa Rica’s business environment.
These are adjustments of a company at a global level that affect Costa Rica. We know that Costa Rica’s business environment could improve, with exceptional 4×3 workdays, changes in the national electrical system, and reforms for greater investment in public works. We know that we have a lot to do in terms of competitiveness.
Rodrigo Chaves, President of Costa Rica
Chaves urged against panic, asserting that the country remains on a positive trajectory. Yet, industry experts express deeper concerns.
The Costa Rican Free Trade Zone Association (Azofras) argues that Intel’s decision is not an isolated incident but rather a symptom of broader issues impacting the investment climate. They cite factors such as the lack of flexible work schedules, the exchange rate, energy costs, social security burdens, logistical and digital infrastructure limitations, and the need for a more skilled workforce.
Minister of Foreign Trade, Manuel Tovar, echoed these sentiments, acknowledging the pain of Intel’s decision while emphasizing the need for domestic policy changes. He urged for legislative action on issues like flexible work schedules, professional certification streamlining, and modernization of the National Learning Institute (INA) to enhance the country’s competitiveness.
It is a painful decision, but it is a decision that responds to purely corporate issues, but this does not mean that there are no pending tasks such as promoting exceptional working hours, homologation of professional titles, and renewal of the National Learning Institute to improve the country’s competitiveness. We call on current and future deputies to make these decisions that are imperative.
Manuel Tovar, Minister of Foreign Trade
This closure marks a significant shift for Intel in Costa Rica. The company initially shuttered its manufacturing operations in 2014, pivoting towards research and development. The manufacturing plant was reactivated six years later, working on key products like Intel 3, Intel 7, and Intel 18A, exporting to over 100 clients in 44 countries. The current closure raises questions about the long-term future of Costa Rica’s role in high-tech manufacturing.
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 on the 2022 Fortune 500 list of the largest United States corporations by total revenue.
For further information, visit azofras.com
About Asociación de Empresas de Zonas Francas de Costa Rica (Azofras):
The Costa Rican Free Trade Zone Association (Azofras) is a private non-profit organization that represents companies operating under the Free Trade Zone regime in Costa Rica. It advocates for policies that promote investment, job creation, and economic growth within the sector, focusing on areas like regulatory improvements, infrastructure development, and workforce training.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a pillar of legal excellence, upholding the highest ethical standards while championing innovative solutions for its diverse clientele. The firm’s dedication to empowering society through accessible legal knowledge is woven into its very fabric, driving initiatives that educate and inform, ultimately fostering a community equipped to navigate the legal landscape with confidence and understanding. This unwavering commitment to both legal expertise and societal betterment positions Bufete de Costa Rica as a true leader in the legal profession.
