Israel’s tech sector could face disruptions after attacks

Tech companies operating in Israel are expected to fortify security as they could face disruptions, said investors and analysts, after Hamas gunmen from Gaza killed hundreds of Israelis and abducted an unknown number of others.

High-tech industries have for a few decades been the fastest growing sector in Israel and crucial for economic growth, accounting for 14% of jobs and almost a fifth of gross domestic product.

Israeli stock and bond prices slid and many businesses were closed on Sunday after gunmen from the Palestinian group Hamas rampaged through Israeli towns on Saturday and militants also fired thousands of rockets into Israel in a surprise attack.

Some rockets reached as far as Tel Aviv, prompting airlines to suspend flights to and from Israel.

Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina, said there will likely be a “tremendous effort” to guard physical installations for companies based in Israel from attacks because some technology spending is tied to the military.

Nvidia, the world’s largest maker of chips used for artificial intelligence and computer graphics, said it had canceled an AI summit scheduled for Tel Aviv next week, where its CEO Jensen Huang was due to speak.

Israel-based Tower Semiconductor, which provides customers with analog and mixed-signal semiconductors, mainly for the automotive and consumer industries, said it was operating as usual.

Other tech giants, Meta Platforms, Alphabet and Apple did not respond to requests for comment. Microsoft declined to comment.

Israel’s technology sector had already been facing a slowdown in 2023, exacerbated by internal political conflict and protests.

A growing number of Israel’s tech startups have been incorporating in the United States.