Israeli Semiconductor Exports To China Increases 80%

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An employee works on a mobile phone production line at Huawei's factory campus in Dongguan, Guangdong province, China March 25, 2019. Picture taken March 25, 2019.

Israel Export Institute data showed that the Israeli semiconductor exports to China increased by 80 percent year on year in 2018 to 2.6 billion yuan. The countries exports to the United States declined by 20 percent to $ 860 million.

The Deputy Director of North East Asia Department in the Israel Ministry of Foreign Affairs and the former Consul General of Israel Consulate Generate in Chengdu, Amir Lati, said during an interview with National Business Daily that Israel's semiconductor exports currently contributes more or less 56 percent of the total exports to China.

There are reports also of notable increases in other technology products including smart manufacturing and medical devices in addition to the semiconductor exports. A private equity investor with knowledge of the industry was quoted saying that Israel has an advanced and application-oriented R&D capacity which makes it fit well to the Chinese market.

Israel currently has no less than 160 semiconductor companies which compete with the branches of all international semiconductor giants. Mr. Lati revealed that a majority of Israeli semiconductor export to China are produced by Intel.

Last year, the export of computer chips of Israel to China increased after Chinese firms bought more semiconductors from Intel's Kiryat Gat plant. According to an official at the Israel Institute, the exports of semiconductor to China increased by 80 percent in 2018 in which at least 80 percent was contributed by Intel.

The increase in export to China is good news for Israel since it pushes to have deeper ties with China and the semiconductor industry accounts for $ 3.9 billion of the overall goods exports in 2018. China and Israel started their negotiation on trade and it is expected that technology will play a major part in the discussions. According to statistics, if diamonds are excluded, the overall exports of Israeli goods to China increased by 50 percent to 4.7 billion.

Intel announced in 2017 that they will invest $5 billion to expand the capacity of its Kiryat Gat Plant in Southern Israel. The Kiryat plant manufactures the smallest and fastest chips in the world. Intel also purchased the Israeli auto-focused chip and technology firm Mobileye for $15 billion. The company also plans to invest an additional $11 billion to build a new Israeli plant.

According to an Intel spokesman, the company exported $3.9 billion worth of goods from Israel last year which is an increase from $3.6 billion in 2017.

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