Amid battle for workers, multinationals scale up chipmaking plans in Israel

Social media giant Facebook is expected to set up an R&D center in Israel focusing on the development of chips, TheMarker reported on Sunday without saying where it got the information. The move would increase competition in hiring engineers, which is already tough as multinational corporations compete with local startups for top talent.

Facebook is still in its initial phases of setting up the center, the report said, but the firm is already in talks on the matter and is looking for a candidate to lead the venture.

Facebook declined to comment.

Google in March appointed Uri Frank, a former Intel Corp. executive, as its new VP of engineering for server chip design to lead a team in Israel for “doubling down” on designing and building custom chips to boost the performance of its computing systems. Nvidia, a US chipmaker, said it plans to recruit 600 engineers locally to boost its activities in Israel in the field of artificial intelligence. And Microsoft is reportedly seeking to invest over $1 billion in Israel, including expanding its research and development activities in chips.

Apple is also likely to further its chipmaking activities in Israel as the tech giant moves to make its own processors for its desktops and laptops, while Amazon and Intel Corp.. too, are developing chips in their R&D centers Israel.

The competition for talented engineers has already pushed up salaries in Israel and according to data published by the Central Bureau of Statistics, pay for engineers is among the highest in the field, with startups offering salaries of around some NIS 30,000 a month ($9,000) in 2019, up from NIS 16,000 in 2016.

Israel suffers from a shortfall of some 15,000 to 18,000 engineers and programmers a year, as demand for skilled workers has boomed.

In 2019 there was a shortage of some 18,500 engineers and programmers, according to data compiled by Start-Up Nation Central, a nonprofit organization that tracks the industry, and the Israel Innovation Authority, published in February 2020. “This shortage is continuing to boost the average wage in the sector, which is eroding Israel’s relative advantage in the high-tech industry,” the Israel Innovation Authority said in its 2019 Annual Report published last year.

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