‘The Coronavirus Lockdown Could Damage Israel’s Image as a Tech Superpower’

While some high-tech companies can keep working from home, hardware firms say that without a permit to work onsite, their ability to supply customers will be undermined

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Tel Aviv on lockdown: Will hardware companies, who need their hi-tech workers to come in, survive the pandemic?
Tel Aviv on lockdown: Will hardware companies, who need their hi-tech workers to come in, survive the pandemic? Credit: תומר אפלבאום

With full lockdown now in effect in Israel, most of the country’s high-tech industry presumably won’t suffer significant harm, since most employees will continue working from home. But one question that must be addressed is how a lockdown will affect hardware and chip companies that operate production lines in Israel.

The sector’s major firms will apparently continue working as usual, but for other companies, the situation isn’t yet clear. Senior industry officials say they expect high tech to be exempt from the lockdown, with the understanding that the number of people working onsite will be reduced to a minimum. But given the current lack of clarity, it’s hard for firms that need to have people in the office to make decisions.

Companies like Intel, Tower and Applied Materials said they are defined as essential enterprises and will therefore be able to continue operating. The same goes for Medtronic, which makes medical equipment. 

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“The company received an essential enterprise permit from the state,” said Yaron Itzhari, CEO of Medtronic Israel. “Most of our employees support medical procedures and the operation of medical technologies, and therefore, they can and must go to the hospitals where they are needed.”

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Kobi Marenko, CEO of Arbe Robotics, which develops radar systems for self-driving vehicles, said his employees must come to the office to continue putting together and testing the systems the firm makes for its customers. 

“Admittedly, no hardware company produces all the components by itself,” he said. “There’s a production line abroad and cargo flights are continuing. With regard to laboratory equipment and so forth, we’ve been working in shifts at the company since early March. 

“Right now, I’m in touch with the Manufacturers Association, and to the best of my understanding, we can continue this way during the current lockdown as well. But if not, that will certainly make it hard for us to supply our customers. What we do here in the office is mainly the final tests before releasing the systems.”

More broadly, however, Marenko fears the impact of the government’s management of the coronavirus crisis on the local tech industry. 

“Overall, the high-tech industry has suffered comparatively less damage,” he said. “The main problem is that the government’s conduct seriously damages Israel’s image as a tech superpower. Everything else, we can overcome.”

Omer Keilaf, CEO of Innoviz, which develops LiDAR sensors for autonomous vehicles, is in a similar situation. “We’re a company that needs access to the labs and equipment in our offices,” he said. “Not everything can really be done from home.

“Even though the lockdown is here in Israel, this has an impact on international companies that choose to work with Israel,” he added. “Delays in service undermine business with international companies that are less focused on the micro in Israel. For international companies to have faith in working with Israeli companies, we have to be leery of continuing to halt work.”

Due to the fear that the lockdown might damage local hardware companies, Israel Advanced Technology Industries, an umbrella organization of local tech companies, submitted an urgent request to the government on Thursday to recognize certain high-tech and biomed companies as essential industries and exempt them from the lockdown that will begin on Friday.

“The high-tech industries are the growth engine of Israel’s economy, and most export their products to the global market,” its letter said. “Imposing a hermetic lockdown and full restrictions on companies that can’t convert 100 percent of their activity to remote will mortally damage them and dramatically harm the Israeli economy.”

The organization warned that the government must not treat all companies the same by locking them all down. While most companies can keep going by working from home and can expand their remote work to comply with lockdown rules, it said, other companies can function only if employees come to their offices and labs.

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