The horrifying conflict between Israel and Hamas, branded as a terrorist organisation by the U.S. and other nations, is causing not only immense human suffering but also significant disruptions in the global electronics and tech sector.
In essence, the Israel-Hamas conflict underscores the delicacy of global supply chains, especially when confronted with geopolitical strife. The events unfolding exemplify the pressing need for companies to exhibit flexibility and foresight, emphasising the importance of contingency plans during such volatile periods, reports EPS News.
Israel, home to a vibrant tech scene, hosts 500 multinationals including the likes of Intel, IBM, Apple, and Google, most of which established research and development centres after acquiring Israeli start-ups.
Notably, Israel invested 4.3% of its GDP in civil research and development in 2015, the highest globally. As the nation faces threats from Hamas, many workers, including senior executives, have been summoned as reservists for the Israel Defense Forces. A call-up of an unparalleled 300,000 reservists has been announced, which may include many from tech companies based in the U.S. This mobilisation undoubtedly impacts their regular business operations.
Prominent in the semiconductor industry, Tower Semiconductor operates two factories in Migdal HaEmek and maintains its operations amidst the conflict. Intel, another significant player, holds the title as Israel’s largest privately held employer and exporter. The tech giant has development centres scattered across the country and factories in Kiryat Gat. The latter, situated a mere 12 miles from the Gaza border, raises safety concerns, given its proximity to the conflict zone.
Intel, in response to its recent massive investment announcement of $25 billion in a new factory, confirmed their unwavering commitment to Israel. The company also emphasised its proactive measures in ensuring the safety of its facilities and staff. “Our intention to expand manufacturing capacity in Israel is driven by our commitment to meeting future manufacturing needs… and we appreciate the continued support of the Israeli government,” stated Intel.
However, the broader logistics sector is feeling the strain. The blockade of Gaza by Israeli forces has hindered thousands of Palestinians from accessing their workplaces in Israel, inducing staff shortages across industries. This blockade, combined with heightened border controls, flight cancellations, and disruptions in sea routes, has significantly impeded the supply chain.
The resultant backlog is evident with numerous travellers stranded at Tel Aviv’s Ben Gurion airport. Leading carriers like UPS and FedEx have either reduced or completely halted flights to Israel. The sea freight industry isn’t faring much better, with intensified controls by the Israeli Navy causing delays.
The U.S. Navy’s deployment of the USS Gerald R. Ford Carrier Strike Group, which boasts the capacity to carry up to 90 aircraft, including the state-of-the-art F-35 fighter jets, adds another dimension to the region’s situation.
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