Khaberni - In a new setback hitting the Israeli economy and the advanced technology sector specifically, the economic newspaper Globes disclosed that the Japanese electronics company "Sony" decided to dismantle its chip development activity in Israel.
"Sony" also decided to revert the entity in this field back to its former state as an independent company under the old name "Altair Semiconductor", a move the newspaper considered a "clear retreat" from its project to establish a permanent development center in Israel.
The End of the Japanese Development Center in Israel
According to Globes' report, the Hod Hasharon factory located in Herzliya – which employs about 200 people – will return to operate as an independent entity after being one of the most prominent "Sony" investments in Israel since its acquisition of the startup "Altair" in 2016 for $212 million.
The decision – as explained by Globes – came after a series of successive layoffs, the latest of which occurred months ago when dozens of employees were laid off as part of a comprehensive restructuring plan.
The Israeli newspaper points out that Sony had intended through this center to establish a foothold in the market of advanced communication chips, but the general trend in recent years – especially after the war and the decline in foreign funding – led the company to reconsider the feasibility of investing in Israel.
Strategic Loss for Israeli Technology
According to Globes, the "Sony Semiconductor Center in Israel" specialized in developing communication chips for "LTE" and "5G" networks used especially in the supply chain and warehouse management sectors, to improve the performance of logistic systems through inventory tracking and machine management.
However, the newspaper asserts that the deterioration of the business environment and the retreat in economic and security stability in Israel made investing in advanced research "a risk that cannot be justified."
Sources in the sector told the newspaper that the decision "signals a loss of confidence in the continuity of the Israeli development environment which was previously marketed as the second Silicon Valley."
Altair's Return to Square One
The newspaper reminded that "Altair" was among the most prominent Israeli companies in the first decade of the new millennium, where it developed fourth-generation communication chips and "WiMAX" technologies before selling them to "Sony" in a deal valued at $212 million after it had garnered investments amounting to $135 million.
Now, "Sony" will revert to its previous state as a small independent company while retaining only a stake in it without a direct management role.
Globes affirmed that this step represents an "actual withdrawal" of the Japanese company from the Israeli industrial scene, despite what "Altair" symbolized in terms of technological cooperation between Israel and Japan.
Administrative Silence and Fears of a New Wave
Globes mentioned that the current management led by Nohik Semi will temporarily continue to manage the work after the separation, but it declined to comment on the decision or provide any details regarding the fate of the employees.
Sources within the technology sector report that the Japanese withdrawal serves as an early warning, expecting that other foreign companies might follow the same path amid dwindling government support and rising operating costs.
"Sony's" decision adds to a series of foreign withdrawals that have been increasing since mid-2024, with rising political unrest and economic contraction leading to a sharp decline in direct foreign investments in Israel.
Globes concludes its report by stating that "Sony's" withdrawal is not merely the closure of an industrial facility but "a harsh slap to the sector that Israeli policymakers have long boasted about," asserting that this move "reflects the erosion of competitive advantage in advanced technology fields" and that Israel "is gradually losing its position as a regional innovation hub."
