New Mexico’s exports to Israel ballooned from just $20.9 million in 2010 to $1.295 billion last year, helping the state earn first place nationwide in total export growth in 2012, but nearly all sales to Israel likely came from Intel Corp.
Of total exports to Israel in 2012, about $1.282 billion, or 99 percent, were computer and electronic products, according to the U.S. Commerce Department’s Foreign Trade Division. Traditionally, the lion’s share of those types of exports have come from Intel in Rio Rancho, which supplies components to Intel facilities worldwide.
Intel does not publicly discuss its export activities, and neither the Commerce Department nor the state Economic Development Department offer company specific trade data. But EDD Trade Specialist Edward Herrera said major upgrades at Intel manufacturing facilities in Israel likely accounted for much of the jump in computer and electronics sales last year.
“Intel has been upgrading a plant near Tel Aviv, and the company ships a lot of equipment and materials from Rio Rancho, so a large percent of the export increase is taken up by the opening of that facility,” Herrera said.
Intel has four development centers and two production facilities in Israel. The company opened its newest plant, Fab 28 in Kiryat Gat, in 2008. It has since invested about $3 billion for the factory to transition from 45-nanometer chips to production of more-advanced 22-nanometer chips.
At a press conference in Tel Aviv this month, Intel executives said the company has invested about $10.5 billion in Israel in the past decade. Intel is Israel’s largest private employer with about 8,500 workers.
Notwithstanding Intel dominance of New Mexico sales to Israel, Gov. Susana Martinez’s administration has prioritized export diversification with programs to encourage and assist local businesses in exploring and expanding sales overseas. That has led to much more diversity in the types of products exported and the countries and regions where goods are shipped.
Herrera said Intel accounted for 66 percent of all state exports to other countries in 2005. But that declined to 54 percent last year, with huge jumps in sales of everything from non-electronic machinery and fabricated metal products to value-added food, electronic equipment and plastic and rubber goods.
Geographically, exports have particularly increased to Mexico and South America, where the Martinez administration has led trade delegations, and to the Middle East.
State exports to Mexico grew by 44 percent since 2010, the year before Martinez took office, to a record $617.6 million last year.
Sales to South America jumped 90 percent in the same period, from $39.2 million in 2010 to $74.7 million in 2012. That includes a hefty 198 percent jump in sales to Brazil last year, and a 160 percent increase in exports to Chile.
Sales in the Middle East, not including Israel, also increased by 69 percent since 2010, from $35.5 million to $60 million last year. That includes a 14.5 percent hike in sales to Saudi Arabia, from $14.5 million in 2011 to $35.5 million in 2012.
Trade diversification and growth, combined with the leap in Intel exports to Israel, have pulled New Mexico out of an export slump that began in the recession. Income from New Mexico sales worldwide plummeted from $2.783 billion in 2008 to $1.541 billion in 2010.
But last year, exports reached their highest level since 1999, earning the state bragging rights for rapid growth.
“In 2010, we ranked 38th in the country in export growth,” Gov. Martinez said at a press conference on Tuesday in Albuquerque. “We were third in 2011, and in 2012 we are first. We’ve come a long way in just a couple of years.”
The state is now working particularly hard to diversify its exports to Israel.
Local businesspeople formed a New Mexico-Israel Business Exchange in 2011, which has been working to increase trade ties. In late April, the Business Exchange will join the EDD’s International Trade Office, the Bernalillo County Trade Alliance and the City of Albuquerque on a trade mission to Israel.
— This article appeared on page B1 of the Albuquerque Journal