Intel is still one of the main players in the semiconductor industry since introducing microprocessors. Its dominant role is, of course, on the one hand due to its first mover advantage but on the other hand mostly due to its high investments in R&D which enables Intel to launch constantly improved microprocessors. However if Intel wants to retain its competitive advantage and its high R&D spending, it has to build plants outside the United States in order to save costs. In 1996 Intel’s portfolio of international production plants consists of sites in Israel, Ireland, China and the Philippines, in order to reduce the risk of only investing heavily in one region and corresponding to this to diversify. Intel considers Latin America as the next site location because “the region offers relatively low labor costs as well as logistical advantages for exporting to the United States or Europe” Thus the factory is planned to be conducted as an offshore plant. The case study about Intel’s Site Selection Decision in Latin America shows clearly that the process of international site selection is associated with a lot of different methods, stages of countries’ analysis and evaluations. But all these are essential and necessary in order to invest in the right location and gain sustainable and competitive advantages. In the following our group is going to take the position of Ted Telford, the only full-time member of Intel Corporation’s worldwide site selection team, to recommend Intel’s headquarter, where to build the assembly and testing facility in Latin America. This includes a definition of Intel’s site selection criteria, the actual site selection process and a recommendation for the future site selection process.

II. Site Selection Process

The decision for an international production site must be well considered because it is a noticeable investment which sometimes even decides about the company’s future. Therefore every site selection process should always start with the definition of conditions on which the countries are evaluated and compared with each other. Furthermore the defined criteria should be ranked according to the importance for the company.

1. Key Factor Analysis

For a highly systematic site selection process, Intel was considering a few concrete factors following. In an article, Ted Telford indicated these kinds of elements as central concerns.

Political and economic stability

Labor unions and labor regulations