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Mexican Manufacturing Cost Fact Sheet
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Mexico has become a major hub for the data center supply chain, especially for U.S. hyperscalers building capacity in North America.
While Mexico has relatively few companies manufacturing complete server racks, there is a strong ecosystem producing electrical, cooling, mechanical, connectivity, and precision metal components used in data centers.
Several manufacturers with a strong presence in Mexico are expanding their operations to meet this rising demand for AI infrastructure electrical equipment and data center support.
Meanwhile, other companies are considering manufacturing in Mexico for the first time due to the available technical labor, cost-effectiveness, and reliable supply chains this strategy offers.
With high demand from infrastructure suppliers, including HVAC and electrical hardware, all companies need more space to create products or machinery that support data center builds, such as service racks, transformers, etc.
Estimates show the data center and AI infrastructure manufacturing market will reach upwards of USD $82.5B through 2031, and the growth will only continue to rise as new technology and opportunities are revealed.
Manufacturers wanting to set up operations in Mexico can take advantage of hubs established throughout the region, a technically skilled labor force, strong supply chain, and the unique offering of shelter services.
As a shelter company in Mexico with 45+ years of service, IVEMSA successfully positions manufacturers in their ideal location and building, helps recruit top talent, and handles all administrative responsibilities to get production up and running quickly and efficiently, all of which helps companies stay competitive.
| Region | Main Strengths |
| Monterrey | Electrical equipment, switchgear, automation, UPS |
| Reynosa | Connectivity, networking, cable assemblies |
| Ciudad Juarez | Electronics manufacturing, fiber optics |
| Guadalajara | Servers, networking equipment, EMS, AI hardware |
| Tijuana | Precision sheet metal, electronics, thermal products |
| Mexicali | Precision sheet metal, electronics, thermal products |
| Nogales | Connectors, electrical products |
The high skill level and availability of Mexico’s workforce have been essential to the expansion of U.S. industries for decades.
Mexico is known for its dedication to the manufacturing industry and graduates over 110,000 engineers every year, supporting sectors including aerospace, automotive, and electronics manufacturing.
U.S. companies also coordinate with universities in Mexico to establish training programs to fulfill a range of necessary roles for specific projects.
This direct link to industrial talent becomes even more valuable as technical knowledge and hands-on proficiency surge in demand with the establishment of emerging data center and AI infrastructure electrical equipment manufacturing.
A Mexico shelter company can help manufacturers with networking, recruiting, and hiring top talent, as well as anticipating changing needs when scaling production.
Additionally, U.S. manufacturers setting up production in Mexico require approval into the IMMEX program and VAT certification.
When applying as a standalone entity, this process can take five to six months before approval is granted. Alternatively, working with a shelter company like IVEMSA, companies receive expert guidance to help expedite approval and save 16% VAT.
The full suite of shelter services also includes site selection, HR and payroll, taxes and accounting, and other necessary administrative responsibilities to launch production, saving manufacturers labor and infrastructure costs.
With over 45 years of experience in the industry, IVEMSA has networks and local knowledge to connect companies with the best solutions for their specific project goals. With the help of a shelter company, manufacturers can launch production quickly and efficiently without compromising quality or delivery times.
This expertise minimizes the risk for manufacturers operating in a foreign country as well as provides guidance to stay up-to-date with fast-moving changes to market demand and technological innovations.
Electronics manufacturing is already a strong sector that relies on manufacturing in Mexico to meet production demands. Due to IP protection already in place, this is valuable for newer technologies as well, including AI infrastructure and automation.
U.S. manufacturers receive special protections under the USMCA regarding copyright, trademarks, and other security protocols to keep innovations protected and penalties applied when violations occur. And, when working with a shelter company, companies retain proprietary ownership over all products and processes.
Mexico is part of international trade agreements with 52 countries, including the USMCA. Labor, tax, and trade laws can be complex and change over the course of production, which makes having a local expert essential to remain in compliance and avoid penalties.
Shelter services include designated customs brokers in the U.S. and Mexico, as well as support when applying for the IMMEX program and VAT certification to keep operations streamlined and as stress-free as possible.
Innovation requires flexibility, particularly as companies anticipate new opportunities in the growing sector of data center and AI infrastructure manufacturing. Shelter services are designed to adapt to each company’s specific needs and can be scaled up or down as needed.
This allows manufacturers to eventually graduate from the shelter model and establish a standalone entity if and when the need arises, or change the scope of how services are applied as manufacturing grows.
Get more information about what it costs for skilled labor in Mexico and setting up your own manufacturing operations.
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