In a recent publication, the U.S. Embassy in Costa Rica referred to Costa Rica as a “silicon rainforest.” The post explained what the semiconductor supply chain is and how the United States is making it more resilient by bringing it to the Western Hemisphere, highlighting Costa Rica’s role in this effort.
For the United States, Costa Rica has great potential in the semiconductor industry and has been a strategic ally in the region. Since the pandemic, the United States has sought to diversify its markets and establish semiconductor hubs that are geographically closer. “The economic shocks caused by the COVID-19 pandemic severely disrupted the global semiconductor supply chain,” the U.S. Embassy said. The pandemic and its consequences also brought to light the need to strengthen the supply chain and make it more resilient.
“A resilient supply chain is one that can adapt, recover, or reestablish itself easily when it faces economic hardships,” the Embassy highlighted. As a response to these challenges, the U.S. has increasingly looked to strategic partners like Costa Rica to bolster the supply chain. On July 14, 2023, the United States announced a new alliance with Costa Rica to diversify and secure the semiconductor supply chain, reflecting the strong bond of cooperation between the two countries.
Gina Raimondo, U.S. Secretary of Commerce, visited Costa Rica to formalize the partnership. “Costa Rica has great potential to contribute to the semiconductor industry, particularly in the area of assembly, testing, and packaging (ATP)—a critical part of the semiconductor production process,” she said.
As explained by U.S. officials, the production process of microchips involves three main phases: design, fabrication, and ATP. Over 70 countries are involved in this process. Costa Rica’s main focus would be on phase three. The United States leads the design phase, where the cost, power consumption, and capacity of the chip are determined. At the manufacturing stage, semiconductor production equipment is expensive and extremely difficult to create. It requires high precision, scale, speed, and reliability.
Raw and nanomaterials, such as silicon wafers, as well as certain chemicals, are essential for the process. The main suppliers of these wafers are located in Japan, Taiwan, Germany, and the Republic of Korea. East Asia produces 75% of the world’s semiconductors. The CHIPS Act, signed by President Biden, seeks to increase U.S. semiconductor manufacturing and diversify the U.S. supply chain.
During the ATP phase, each chip is cut, separated, tested, and assembled for integration into the final products. Costa Rica is already home to 13 companies from different parts of the world that are part of the semiconductor supply chain.
