For decades, Costa Rica nurtured a vision: becoming a semiconductor powerhouse in the Americas. Strategic investments, skilled workforce development, and courting giants like Intel and Qorvo positioned the nation for success. The U.S. CHIPS Act of 2022, injecting nearly $40 billion to boost regional chip production, seemed the final catalyst. Progress was tangible – high-tech jobs multiplied, and the sector thrived. That promise evaporated abruptly in 2025. Former President Donald Trump’s return to office brought a stark reversal; he labeled the CHIPS Act “horrible” and pushed Congress to repeal it. Overnight, the U.S. subsidies underpinning Costa Rica’s competitive edge vanished. By July, both Intel and Qorvo confirmed they would shutter their Costa Rican manufacturing plants, relocating operations to Asia, as reported in corporate statements and government announcements.
Economic Shockwaves from Plant Closures
The departures delivered a severe blow. Intel closed its assembly plant, operational since the 1990s, while Qorvo ended thirty years of local manufacturing. Together, they eliminated up to 1,400 direct jobs and devastated hundreds of local suppliers. Costa Rica’s Central Bank reacted swiftly, slashing its 2026 economic growth forecast by 0.3 percentage points. Officials cited the semiconductor exodus and a troubling 25% drop in foreign direct investment during early 2025. President Rodrigo Chaves and his economic team emphasized that U.S. policy shifts, not domestic failures, were the primary driver, a stance echoed in official government communications. “External decisions beyond our control have reshaped the landscape,” stated the Ministry of Foreign Trade.
Underlying Challenges Exposed
While U.S. policy was the immediate trigger, business leaders and former officials pointed to deeper, unresolved issues hindering competitiveness:
- Education Gaps: Technical training programs lagged behind industry needs for advanced semiconductor manufacturing.
- Currency Pressures: A strengthening Costa Rican colón against the dollar made exports less profitable.
- Regulatory Stagnation: Key reforms in energy costs, labor flexibility, and visa processing remained stalled in the Legislative Assembly.
The Costa Rican Investment Promotion Agency (CINDE) acknowledged these hurdles, noting they complicated efforts to retain and attract high-value manufacturing despite past successes.
Costa Rica’s Tech Sector Navigates a New Reality
Despite the semiconductor setback, Costa Rica retains significant tech strengths. High-skilled engineering and research roles, particularly in design and development, largely remain intact. Crucially, other tech sectors show resilience. Government statistics reveal a 13% surge in medical device manufacturing investment during 2024. This diversification offers a crucial buffer. The Chaves administration is now prioritizing regulatory streamlining and faster permitting processes to maintain foreign investor appeal in a less certain geopolitical climate. “Our focus is agility and leveraging our proven talent pool in advanced industries,” affirmed the Minister of Economy. Efforts concentrate on sectors less vulnerable to U.S. subsidy fluctuations, including medical devices, cybersecurity, and sustainable technology.
Costa Rica’s journey from aspiring semiconductor hub to navigating unexpected corporate exits underscores the fragility of global supply chains and the profound impact of foreign policy shifts on small economies. While the loss of Intel and Qorvo manufacturing is a significant setback, the nation’s underlying strengths – a skilled bilingual workforce, political stability, and a strategic location – endure. The challenge now lies in accelerating reforms, doubling down on diversification, and proving resilience beyond U.S. subsidies. For global investors watching, Costa Rica’s ability to adapt will be its ultimate test.
Must Know
Q: Why did Intel and Qorvo leave Costa Rica?
A: Both companies announced closures in July 2025, relocating manufacturing to Asia. The primary catalyst was the Trump administration’s push to repeal the U.S. CHIPS Act, which eliminated crucial subsidies that made Costa Rican operations financially competitive. Corporate press releases and Costa Rican government statements confirmed the policy shift as the main reason.
Q: How many jobs were lost due to the Intel and Qorvo shutdowns?
A: The combined closures resulted in the loss of up to 1,400 direct jobs. Hundreds more indirect jobs in the local supply chain were also significantly impacted, according to Costa Rican government assessments and business group reports.
Q: What was the economic impact on Costa Rica?
A: The Central Bank of Costa Rica cut its 2026 GDP growth forecast by 0.3 percentage points directly citing the semiconductor exits. Foreign direct investment also dropped by 25% in early 2025, partly attributed to this event and global uncertainty.
Q: Did Costa Rican government policies contribute to the companies leaving?
A: President Chaves and his ministers stressed U.S. policy was the main cause. However, business groups and former officials highlighted persistent local challenges like currency appreciation, lagging technical education, and stalled reforms on energy, labor, and visas as underlying competitiveness issues.
Q: Does Costa Rica still have a tech sector after these closures?
A: Yes. While high-volume semiconductor manufacturing is gone, engineering and research roles remain. Crucially, other tech sectors, especially medical devices, grew significantly. Government data showed a 13% increase in medical device investment in 2024, indicating ongoing diversification.
Q: What is Costa Rica doing to attract future investment?
A: The government is prioritizing faster regulatory approvals, streamlining bureaucracy, and emphasizing sectors like medical devices, cybersecurity, and clean tech. The focus is leveraging its skilled workforce and stability without relying solely on U.S. subsidy programs.
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