Intel doubles investment in Costa Rica chip manufacturing plant amid surging demand

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Intel plans to invest $600 million, up from $350 million, in the chip manufacturing plant

As a result of the ongoing global shortage of semiconductors, Intel this week revealed that is has nearly doubled a previously proposed investment in a micro-chip plant in Costa Rica from the $350 million announced in December to $600 million. In addition, the company now hopes to triple the number of new jobs created over the next few months.

“We are very pleased to announce this increase in investment to be made in the country and which is also associated with an increase in jobs,” said Timothy Scott Hall, an Intel Costa Rica manager and spokesperson.

In 2014, Intel shut down its Costa Rica facility, located in Belén, laying off 1,500 workers. In 2000, microchips represented 36% of the country’s total exports. Prior to the facility’s closing, Foreign Trade Minister Anabel González called the company’s presence the “most important vector of development of the country in the last 15 years.”

However, as global demand for chips surges and a shortage is expected to continue until 2023, Intel is looking to reestablish its footprint in the Central American country.

“Intel continuously evaluates its operations around the world to ensure that we have the right capacity to meet global demand. We will begin assembly and testing operations in Costa Rica in order to expand our capacity and continue to meet the needs of our customers,” Ileana Rojas, general manager of Intel Costa Rica said in December.

Intel isn’t alone in making large chip manufacturing investments. Samsung, for instance, said that it’s considering a $10 billion chip manufacturing plant in Texas. Competitor Taiwan Semiconductor Manufacturing CO. (TSMC), recently suggested plans to build new factories in the U.S. and Japan, as well.

Further, in June, the U.S. Senate passed a measure, aimed at countering China’s technological strength, outlined $250 billion in spending, a large portion of which is designated to boosting U.S. technology research and development and chip production. According to the executive summary of the bill, it pumps tens of billions of dollars into incentives for domestic semiconductor production and R&D, with some specific funding meant to build a more robust supply chain for the chips used by auto manufacturers, who have been hit particularly hard by the shortage.

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