QCOSTARICA — “Who wants to carry bunches of bananas rather than go to work in a microprocessor factory producing the world’s most in-demand technology?”
That was Costa Rican President Rodrigo Chaves’ question to young Ticos (Costa Ricans), last March, while visiting a region of the country that has a large banana production industry with United States Secretary of Commerce, Gina Raimondo.
The U.S. and Costa Rica have a similar goal, albeit for different reasons. They both want to grow the microchip manufacturing industry in the country. For Costa Rica, greater Foreign Direct Investment (FDI) means a more skilled workforce, greater capital inflows, and fits into the country’s long term economic plans. On the other hand, the U.S. is desperate to reduce their overwhelming dependency on the South Asian market for microchips.
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During the March meeting, Raimondo and Chaves discussed efforts to improve semiconductor supply chain capacity in the Western Hemisphere, with the former welcoming the efforts of the Government of Costa Rica to elevate the country as a key market for semiconductor assembly, testing, and packaging.
Also discussed in March was the Partnership of the Americas Center of Excellence and workforce development efforts for Partnership for Economic Prosperity of the Americas countries in critical digital technology sectors, ranging from cybersecurity to semiconductors to artificial intelligence.
Investing in Costa Rica
In 2014, Intel announced that after a nearly two-decade presence in Costa Rica, it was moving its production facilities to sites in China, Malaysia and Vietnam.
Read more Intel Confirms Plant Closing In Process, And Reduction of Personnel and Production
This seemed like a setback for one of Central America’s most stable democracies. But ten years, a pandemic, and a few trade wars later, it is regaining the confidence of the tech sector.
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In August 2022, Intel inaugurated its only semiconductor chip assembly and test operations facility in the Western world in Costa Rica. Since, the company has said it plans to invest US$1.2 billion in the country over two years.
In 2022, Costa Rica ranked first in Investment Monitor’s Inward FDI Performance Index, which measure’s a country’s inward investment levels against its gross domestic product.
Costa Rica has also had huge success in creating a medical device manufacturing sector. This has been one of the country’s top export for years.
The Chaves government has also made more efforts to attract FDI with more tax incentives, regulatory reforms, and a 99% renewable energy grid. The government also launched a “roadmap for strengthening the semiconductor ecosystem in Costa Rica” which includes: talent development, modernizing incentives, attracting investment and improving their regulatory framework.
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The US’s focus on strengthening supply chains with stable allies and bringing production closer to home will likely continue to benefit Costa Rica’s plans of becoming Latin America’s Silicon Valley.
With files from Investment Monitor, and US Department of State Press Release
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