Manufacturing in Mexico Provides Cost-Effective Solutions for Emerging Semiconductor Sector

Key Takeaways:

• Semiconductor manufacturing in Mexico is on the rise as global companies find the supply chains, workforce, and infrastructure they need to meet increasing demand.
• Bi-national initiatives between the U.S. and Mexico provide strategic advantages already proven successful among other sectors, including automotive, aerospace, and electronics manufacturing.
• Working with a Mexico shelter company offers all-encompassing administrative support necessary to get production up and running quickly and efficiently.

The semiconductor industry has always been a sub-sector under electronics manufacturing, but has started to emerge as a force all its own.

Though still in its early stages of development, manufacturing in Mexico is keeping pace with the growth of this evolution and serves as an ideal fit for those looking to fulfill the more labor-intensive part of the process, including tests, packaging, and assembly.

A Proven Model for an Emerging Sector

Manufacturing in Mexico has been an integral part of the continuous growth of the aerospace, automotive, and electronics industries, among other sectors.

With advantages like steady supply chains, cost-effective, highly skilled labor, and close proximity to a U.S. audience, global manufacturers have relied on industrial hubs in states throughout Mexico for decades.

Semiconductor manufacturing in Mexico can build upon this proven history of success and offer industrial support in assembly, testing, and packaging (ATP), supply chain operations, and intellectual property (IP) protection.

Assembly, Testing, and Packaging (ATP):

Skyworks Solutions, Texas Instruments, Infineon, and Qualcomm are all major international players with a strong presence already benefiting from the advantages of semiconductor manufacturing in Mexico.

As this growth continues, other semiconductor companies can rely on existing capabilities in these processes to accommodate these specialized needs.

Supply Chain Operations

Mexico is primed to increase its involvement in the semiconductor supply chain through its strategic access to materials necessary for production that typically come from Europe and Asia.

The industry also has the appropriate infrastructure in place and meets logistical demands, particularly favorable for companies headquartered and/or with a target audience in the U.S.

IP Protection

Due to continuous IP protection challenges with China regarding sensitive technology, including semiconductors, manufacturers are looking for an alternative.

Manufacturing in Mexico provides a bi-national solution where certain roles, like research and development, can remain in the U.S. while the more technically focused processes can be completed in Mexico on a larger scale and lower cost.

Strategic Advantages of a Two-Country Initiative for Semiconductor Growth

Border regions part of semiconductor manufacturing in Mexico include San Diego/Tijuana and Mexicali/Phoenix. Additionally, Jalisco, Chihuahua, Querétaro, and Aguascalientes have already emerged as key leaders in semiconductor manufacturing and are expanding participation in ATP and supply chain needs.

Other advantages of a two-country initiative between the U.S. and Mexico that’s proven effective with traditional manufacturing include:

CHIPS ITSI

This initiative enhances ATP capabilities in key partner countries beginning with Mexico, Panama, and Costa Rica.

The collaborative effort is a commitment to sustainable economic development to strengthen regional capabilities for growth and technological advancement in the semiconductor sector.

Geographic Proximity

The proximity between the U.S. and Mexico also provides a significant geographic advantage, resulting in less costly transportation and logistical convenience.

This has been one of the major benefits other sectors have considered when moving manufacturing from China to Mexico and/or expanding their presence beyond the U.S.

Skilled Workforce

The availability of a well-trained workforce has been an incentive for manufacturing in Mexico.

With the decline of qualified industrial workers in the U.S., expanding efforts to Mexico has been a cost-saving way to meet growing demand.

Interested in Semiconductor Manufacturing in Mexico?

All eyes are on the semiconductor industry as it continues to emerge as a larger sector, and partnering with a Mexico shelter company like IVEMSA is beneficial if you are entering expansion for the first time.

A shelter company provides the infrastructure, industry experience, and local expertise to support companies across major sectors in launching production in as little as three to four months.

It’s part of a strategy that U.S. and other foreign manufacturers have benefited from for decades. It’s a way to minimize risk and liability, lower production costs, and reduce the learning curve when operating in a foreign country.

Learn how shelter services can be customized to benefit your specific goals. Contact IVEMSA today to get the conversation started.

Source:

https://pa.usembassy.gov/u-s-department-of-state-and-inter-american-development-bank-collaborate-on-semiconductor-initiative-in-the-western-hemisphere/