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Intel Corp will close its chip assembly and testing facility in Costa Rica as part of a global restructuring programme designed to improve operational efficiency, in the latest withdrawal by a multinational manufacturer from the Central American nation.
The US semiconductor behemoth announced it would consolidate its Assembly and Test Manufacturing operations in Malaysia and Vietnam over the coming months, phasing out those functions in Costa Rica. The decision affects part of Intel's 3,400-strong workforce in the country, though the company maintained that Costa Rica would remain "an important hub" employing more than 2,000 people in engineering and corporate services.
"Following a comprehensive review of our business, we are announcing changes today that will drive greater efficiency and utilisation within our global manufacturing network," Intel told employees. The group emphasised its commitment to the country, stating: "For nearly three decades, Intel has been innovating and investing in Costa Rica, and this legacy will continue."
The closure marks the second significant reduction in Intel's Costa Rican manufacturing operations. The company previously shuttered its assembly and testing plant in April 2014, relocating those functions to Asia, before reactivating the operation in September 2021 with an initial $350mn investment.
Intel's retreat compounds concerns about Costa Rica's competitiveness as an investment destination following similar moves by other technology companies. Qorvo, the US semiconductor specialist, recently announced the closure of its Costa Rican operations to relocate them to Asia, whilst Pfizer has disclosed restructuring plans affecting jobs in the country.
Juan Ignacio González Arias, managing partner of CIHubs, warned that Intel's plant closure would result in the loss of 1,400 skilled jobs and affect a network of approximately 4,500 local suppliers. He attributed the decision to "a more raw and realistic view of Intel's new leadership", which has acknowledged the company is no longer among the top ten in the semiconductor industry.
The collective departures have triggered alarm among Costa Rican business groups, which have called for urgent reforms to safeguard the country's investment climate.
According to La Nacion, the Association of Free Trade Zone Companies of Costa Rica warned that such exits not only mean job losses but also send "a worrying signal to other investors evaluating Costa Rica as a destination".
"Key decisions continue to be postponed and issues affecting competitiveness are being downplayed. Costa Rica can no longer downplay or ignore the obvious and passively wait for more companies to decide to leave,” said Ronald Lachner, president of the association.
Likewise, the Costa Rican Union of Chambers and Associations of the Private Business Sector described the departures as "a warning sign of the structural challenges facing the Costa Rican economy" and called for comprehensive measures including labour flexibility reforms, energy system harmonisation, and streamlined bureaucracy.
The exodus has also intensified debate over Costa Rica's exchange rate policy, with critics arguing that the strengthening colón has undermined manufacturing competitiveness. The currency has appreciated roughly 20% against the dollar since the current government took office in 2022, rising from around CRC630 per US dollar to about CRC500. Some analysts contend this monetary policy has made local operations less cost-effective compared to regional competitors or countries with dollarised economies, adding another pressure point as companies weigh currency stability alongside labour costs when making location decisions.
Yet industry leaders are particularly concerned about the ripple effects on Costa Rica's technology and pharmaceutical sectors, which have underpinned the country's economic growth strategy over the past decade. The Costa Rican Chamber of Industries announced it would meet Intel representatives this week to discuss the decision's implications.
Intel's restructuring comes as the chipmaker struggles to compete with rivals such as Nvidia Corp and Advanced Micro Devices, which have benefited from the artificial intelligence boom. The company plans to reduce its global workforce by 15% to around 75,000 employees, down from 99,500 in 2024.
The Foreign Trade Promotion Agency said it was coordinating with Intel to assist affected workers through outplacement services, whilst pointing out that the majority of Intel's operations would remain in Costa Rica.
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