New Report: Hundreds Leave Intel, and Nvidia Is the Biggest Winner
Israel’s high-tech market has been undergoing a profound shift in recent years. If in the past most attention was focused on software, cyber and internet companies, today the center of gravity is gradually moving toward chips, AI infrastructure, advanced communications systems and defense electronics. A new report by Ethosia presents a picture of an industry that is growing, but also under increasing pressure, due to a shortage of experienced engineers with specialized training. ● After Anthropic, OpenAI has filed a confidential prospectus ahead of an IPO ● Siri upgrade and cooperation with Google: all the announcements from Apple’s flagship event
The report is based on a combination of several sources of information, including in-depth questionnaires conducted among 63 companies in the semiconductor, medical device, defense and multidisciplinary sectors, which together employ more than 45,000 workers. In addition, it relies on data from public companies and Ethosia’s collection and analysis of information.
One of the report’s most notable figures offers a glimpse into Intel’s situation. The company, long considered the largest and most influential employer in the industry, recorded a significant decline in headcount, after hundreds of employees left voluntarily, more than 11%. The figure is explained in part by a unique company policy. During the tenure of former CEO Pat Gelsinger, a voluntary retirement process was introduced, under which thousands of employees were given the option to leave in exchange for a cash grant calculated according to seniority, rank and role. In Israel, hundreds of employees agreed to take the grant, and some benefited from it even though they had already found work at other companies or were in the process of joining them. However, new CEO Lip-Bu Tan limited the practice to very senior employees and introduced a unilateral layoff process that mostly ended at the end of last year.
As Globes reported previously, the largest group among last year’s Intel leavers joined Nvidia, a move that was not surprising given the technological proximity between the two companies, both of which develop chips, especially core chips for server farms and computers. In a little more than a year since Tan took office, Intel’s global workforce has shrunk dramatically in line with the new direction, from a company of 109,000 employees to just 85,000 in the most recent quarter. In Israel, Intel employed at its peak about 12,000 workers at its development centers in Haifa, Petah Tikva, Jerusalem and its plant in Kiryat Gat. Today it is down to about 8,000 workers, according to LinkedIn, a decline of 30%. Intel Israel now has roughly the same number of employees it last had in 2012, although since then it has acquired three companies for many billions of dollars, including Mobileye, Habana Labs and Granulate.
Intel said, “The measured period included voluntary retirement programs, so the figure cannot be seen as a simple measure of normal departures. It also does not reflect the significant technological and business progress Intel is making today.”
The report also shows that in the hardware and engineering fields examined, about 34,400 workers are employed in Israel. Despite the relatively high number, companies are struggling to find the workforce needed to continue growing. While the total number of workers in the industry remains high, demand is concentrated in a relatively small group of specialists, including chip architects, AI hardware engineers, RFIC experts, Physical Design engineers and Mixed Signal specialists.
One of the most striking findings is the change in the competition map for workers. In the past, Intel, Marvell, Qualcomm and Apple mainly competed with other chip companies. Today, the situation is completely different. Rafael, Elbit and Israel Aerospace Industries are competing for the exact same workers. The result is that the economy’s three biggest growth engines today, chips, artificial intelligence and defense, are all competing for the same limited pool of workers.
At the same time, the report points to a significant shift in the balance of power within the chip industry itself. Nvidia continues to cement its status as one of the most dominant employers in Israel’s hardware sector. The company recorded 24.4% growth in headcount over the past year and has 417 open positions. Behind the surge in demand is mainly the AI race.
The chronic shortage of workers is dramatically lengthening recruitment processes at companies. According to Ethosia’s placement data, filling senior positions now takes between five and seven months. For many companies, this is no longer just an operational difficulty, but a real business obstacle.
Rising demand is also affecting pay structures in the industry. The data shows that the most sought-after roles are also those seeing the sharpest increase in salary. Chip architects and systems architects are among the highest-paid employees in the sector, and in some cases monthly pay at senior levels is already crossing the 100,000-shekel mark.
Alongside recruitment data, the report provides an interesting look at turnover rates at the industry’s leading companies. Voluntary turnover is considered one of the key measures for assessing employee satisfaction, organizational stability and the ability to retain talent. Here, significant gaps are revealed between companies. Intel leads the list with a turnover rate of 11.2%, followed by Mobileye at 10.2%. Samsung and Rafael also show turnover rates of more than 8%. By contrast, Nvidia’s turnover rate stands at just 1.5% and Broadcom’s at 0.8%, among the lowest in the report. Mobileye clarified, unlike Ethosia’s review based on LinkedIn data, that its voluntary turnover rate is much lower, at 6%.
These differences may indicate the varying ability of companies to retain employees at a time when demand for engineers is at its peak. Experienced workers can now choose among a wide range of job opportunities, and often move between companies while significantly improving their pay and conditions. Companies that can offer employees cutting-edge projects, a clear professional horizon and attractive compensation packages enjoy a major advantage in the battle for talent. By contrast, companies undergoing organizational change or losing ground in the technological race find it harder to keep their experienced workers.
The report also points to a growing gap between companies that succeed in attracting talent and those that struggle to do so. While companies such as Nvidia, Broadcom and Apple enjoy a strong employer brand and operate at the heart of the AI revolution, more established companies must contend with aggressive competition for every experienced worker. Ethosia believes this trend is likely to intensify in the coming years.
In fact, one of the report’s central messages is that the labor shortage has become a strategic national issue. If in the past a company’s ability to grow depended mainly on access to capital and customer demand, today the ability to find and retain experienced hardware engineers has become a decisive factor. Ethosia also warns that all indicators point to the situation worsening in 2027, when demand for senior engineers will continue to grow faster than the supply of graduates and experienced workers in the market.
In the end, the most important figure in the report is not the number of open positions or the level of salaries, but the understanding that human capital has become the most important strategic resource in the hardware industry. In an era in which chip companies, AI corporations and defense industries are investing billions of dollars in developing new technologies, the central question is not who will develop the next product, but who will succeed in recruiting and retaining the people who will build it.
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