Costa Rica is aiming to rival Taiwan in semiconductor production through a partnership with the U.S. to enhance manufacturing capabilities. The country has launched a National Semiconductor Roadmap to further its industry, supported by Intel’s $1.2 billion investment in its production facility. With access to clean, renewable energy, Costa Rica presents a compelling alternative to Taiwan, especially as the latter faces escalating energy costs and geopolitical challenges.
Costa Rica is establishing itself as a competitor to Taiwan in semiconductor production by expanding its technological capabilities. In 2023, the country partnered with the United States to bolster its semiconductor manufacturing, responding to the need for stable microchip sources amid geopolitical tensions. The Costa Rican Ministry of Foreign Trade released a comprehensive National Semiconductor Roadmap aimed at enhancing its semiconductor sector, often referred to as the “Silicon Jungle.”
U.S. Secretary of State Marco Rubio recently reaffirmed the importance of this partnership at a summit with Costa Rican President Rodrigo Chaves Robles, emphasizing the benefits of collaboration to ensure secure supply chains. A statement from the State Department highlighted the contribution of U.S.-trained technicians in semiconductor assembly to mitigate potential supply chain disruptions, underscoring the strength of the relationship between the nations.
Historically, Costa Rica has been overshadowed by its agricultural exports, notably pineapples. However, the nation’s economy began shifting focus in the 1990s following the closure of USAID’s office, which prompted a search for new industries. Costa Rica’s foreign investment office successfully attracted Intel’s attention, leading to the establishment of its first assembly and testing facility, a move that surprised its Latin American competitors.
Despite a decline in production in 2014 as Intel shifted operations to Asia, the company announced a significant $1.2 billion investment in its Costa Rican facility in 2023. This shift is partly due to concerns over Taiwan’s increasing vulnerability to China’s geopolitical ambitions and its own energy policy, which has negatively impacted its semiconductor production environment. Taiwan’s decision to phase out nuclear energy has led to soaring electricity prices that affect chip manufacturers like TSMC.
In contrast, Costa Rica relies almost entirely on renewable energy sources for its electricity, generating approximately 72% from hydroelectric dams and 15% from geothermal heat. This stable and clean energy supply positions Costa Rica as a more attractive location for semiconductor manufacturers seeking cost-effective and eco-friendly power, unlike Taiwan’s coal and gas dependencies going forward. Costa Rica is perceived as being significantly greener than Taiwan, which benefits its appeal to tech companies committed to sustainability.
The sentiment toward Costa Rica’s potential in chipmaking was echoed widely during discussions in Guanacaste Province, emphasizing the nation’s positive outlook. As the semiconductor industry seeks increasingly sustainable and reliable energy sources, Costa Rica’s advancements make it a prime contender in the global semiconductor market, aligning with emerging demands for greener operations.
In summary, Costa Rica is positioning itself as a formidable competitor to Taiwan in semiconductor manufacturing by leveraging its stable and renewable energy sources. The collaboration with the United States enhances its capabilities in this sector, and with Intel’s renewed investment, Costa Rica is embracing a new economic era. As Taiwan faces challenges in its energy policies, Costa Rica’s focus on sustainability and reliability may ultimately attract more semiconductor firms seeking advantageous operational environments.
Original Source: www.motherjones.com
