INVESTING IN DEVELOPMENT INTEL COSTA RICA
Within Intels competitive environment, speed and continual
product improvement were the critical factors driving its decisions
to expand and upgrade its production capabilities. In contrast to
Intels relatively more capital intensive initial fabrication plant
(fab) facilities where the silicon chips are created, Intels
decision on locating new Atp capacity, where the two-step chip
process is completed, was driven slightly more by assured access to
a highly trainable and technical, yet low-cost, workforce. the
workforce could participate in successive revamping and upgrading
of the Atp as the marketplace dictated new performance requirements
every 18 months. Intels location selection apparently was
influenced also by government incentives, in some measure because
its investment decisions were made even before specific product
demand levels could be forecasted with confidence. Firm-specific
concessions and financial incentives were somewhat more important
in locating the capital-intensive fab plants than for Atps. In
contrast, Atp location decisions relied relatively more on
workforce and human resource-related consid-erations, such as
availability of qualified engineers and employee turnover.
Intels Interactive Site Selection Process
Intel engaged in an ongoing process of continually evaluating
possible fab and Atp sites among its investment alternatives. the
company maintained a fluid list of possible host countries for new
Atps, which was actively updated and revised as competitive
circumstances and Intels perceptions of its needs changed. In early
1996, executive management specifically decided to pursue a site
for a new Atp, requiring 400,000 square feet and employing an
initial workforce of 2,000 to assemble and test the new line of
pentium microprocessors. Intel convened a team of experts composed
primarily of people who had significant experience in site
selection, including the vice president for site selection, as well
as other senior executives and staff from several functional areas
within the company.
For nearly two years prior to this decision to select a new Atp
site, Costa ricas national promotion agency had been targeting and
actively approaching large, U.s.-based electronics companies. In
the late 1980s, CInDe (la Coalicin Costarricense de Initiativas
para el Desarrollo) specifically decided to focus its efforts
rather than to spread its limited resources. given Costa ricas
high-level technical knowledge and yet relatively low labor costs,
as well as an abundance of bilingual citizens, CInDe decided Costa
rica might be well suited to the needs of the growing global
electronics industry. In 1993, CInDe began courting Intel. the last
meeting together was held a few months before the location search
for a new Atp was formalized. However, by that time CInDe had
already increased its focus on Intel, establishing a project team
of three senior-most CInDe officials, each focused exclusively on
attracting Intel through discrete functional area assignments, such
as legal regu-lation, free trade zone issues, human resources,
education, real estate, and so forth.
the first stage of Intels formal process began when Intel team
members validated first-level considerations using basic desk
research to eliminate candidates from the long list of countries.
In addition to Costa rica, at this point the list included:
Argentina, Brazil, Chile, China, India, Indonesia, Korea, mexico,
puerto rico, singapore, taiwan (province of China) and thailand.
While not formally ranked, the various criteria weighed at this
first stage included generally the following considerations:
