"Israel must quickly change its national compass if it wants its high-tech industry to survive," said Israel Association of Electronics and Software Industries chairman Elisha Yanay at the association's annual conference today.
Sharpening his rhetoric, Yanay warned, "Israel's high-tech industry is at a noisy and dangerous crossroads. There is the risk of a drop from $25 billion in annual exports, along with the closing of plants and the firing of hundreds of workers, will cost Israel's its technological edge, which will affect the entire economy. These are not pessimistic assumptions about the future, but an immediate reality.
"In recent years, the public and media's attention has been on the budget, cuts, populism, and debates," continued Yanay. "Financial institutions and tycoons are on the national mind, while the high-tech industry has been neglected. With all the attention on gas exploration and the tycoons, it has been forgotten that Israeli high tech is the real growth engine of the Israeli economy."
According to the Manufacturers Association of Israel, high-tech exports totaled $25.6 billion in 2012, 3% more than in 2011, and high tech accounted for over half of manufactured exports, and employed 210,000 people.
No layoffs planned
An interesting panel discussed the crisis in the electronics industry. Dan Vilensky, one of Israel's top high-tech executives and a former chairman of Applied Material Israel Ltd., was the panel's moderator on semiconductors.
Micron Technology Israel general manager Yonathan Wand stole the show. "It's been reported that we're firing 500 people, and I owe the press a big thanks because it broadcast our difficulties," he said. "We're trying to sell the fab with its equipment and people. We have no intention of firing employees, and we haven’t fired anyone. Whether there is an acquisition or a closure, which we don’t intend, when there is an acquisition, we'll examine the workforce."
Micron Technologies Israel began the production of NOR Flash processors with 45/65-nanometer technology in May 2010. Until 2008, its fab was the most advanced in the world for flash processors. In December 2012, Micron Technologies Inc. (NYSE: MU) announced that would it terminate its Israeli fab within two years. Commenting on the company's Israeli production operations, Wand said, "I'm a production man, and I'm proud to be a production man. Production is high tech and it is very sophisticated, requiring people with skills and know-how. You ask if the industry is in a crisis or if it's an opportunity? As for Israel, and in our case, there is no doubt that we're in a crisis. We're an outstanding fab, which is starting its 14th year, but is at risk of closing. That means that we must not march on the spot. I'm optimistic and realistic; I think that we can turn the crisis into an opportunity, specifically for Micron Israel, and for the Israeli market as a whole."
Texas Instruments Israel general manager Moshe Hillel said, "Only eight new semiconductor companies were opened in 2012. There has been great deal of investment here by the government and by academic institutions, and just from the number of failures here we should have been like Taiwan by now. But where is Taiwan and where are we?"
Published by Globes [online], Israel business news - www.globes-online.com - on January 17, 2013
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