High-tech firms worried about violence in Israel

The Associated Press
Friday April 05, 2002

SANTA CLARA — Silicon Valley firms are worried about the increasing violence in Israel, a major hub of the world’s high-tech industry. 

Some of the San Francisco Bay area’s biggest companies, including Cisco Systems, Hewlett-Packard and Sun Microsystems, have offices, labs or factories there, employing thousands of Israelis. 

Chipmaker Intel runs a chip design and development center at Haifa, site of one of the grisliest suicide bombings in recent weeks. 

And as attacks increase against Israeli citizens, some fear the bloodshed could make American companies and investors hesitate to sink more money into the region. 

“I’m sure there are some people staying awake at night worrying about this,” said Risto Puhakka, a high-tech analyst at VLSI Research. “My gut feeling is that they’ll just hold tight. However, you wouldn’t make any decisions (to build new plants) in Israel right now. That would be foolish.” 

Venture capital investment in Israeli technology companies dropped in 2001, falling from $1.5 billion in 2000 to $843.6 million last year, according to the VentureOne research firm.  

Several analysts cautioned, however, the decline could be the result of the worldwide technology spending slump rather than the Palestinian uprising.