By Esteban Arrieta

Country could be key to reducing dependence on microchips from China.

Thanks to a multimillion-dollar investment from private companies and the support of the United States aiming to reduce dependence on microchips from the People’s Republic of China, Costa Rica could become the Silicon Valley of Latin America, according to the prestigious media outlet The New York Times.

In an opinion article by Farah Stockman, who has been part of The New York Times editorial board since 2020, the importance of Costa Rica as a country for doing business and not just for vacationing is highlighted.

“Today, it is said that the U.S. economy depends too much on China for critical supplies, while imports from countries in our own hemisphere, apart from Canada and Mexico, lag behind, according to experts. Our influence in our own neighborhood is declining. It doesn’t have to be this way. I saw evidence of this in Costa Rica, a stable democracy that aspires to become the Silicon Valley of Latin America, with active support from the United States,” the publication states.

The journalist points out how Costa Rica is positioning itself to become a major hub outside of Asia for chip packaging and testing.

“In the 1990s, Intel built a factory near San Jose to do just that. That opened the door to more factories and industries and, as a result, to an increasingly technology-oriented workforce. Today, Costa Rica’s largest export category is no longer coffee or bananas, but medical devices,” the article states.

The U.S. supply chain could be the key to building better relationships in Latin America at a time of growing isolationism in the United States.

“Countries that trade more with their nearest neighbors get the greatest benefits from trade while minimizing the job loss that can come with it (…) Supply chain diplomacy can help. So far, Costa Rica has hedged its bets, signing onto the Belt and Road while also lobbying for the chance to join the USMCA. But the opportunity to become a center for microchips seems to have tipped the balance. Mr. Chaves abruptly excluded Chinese provider Huawei, along with others, from building the country’s 5G network, angering China,” the publication states.

“Sometimes tough decisions are necessary. We are not imagining the future; we are building it, with those we share values with. It is smart, both geopolitically and economically, to foster that sense of shared destiny. It won’t be a quick fix for the region’s many problems, but it can help turn the tide over time,” the publication added.

Reference