On April 20, the Secretary of Economy, Tatiana Clouthier, and Santiago Cardona, general director of Intel in Mexico, signed a collaboration agreement for the transfer of technology and knowledge through innovation resources and long-term training of Mexican talent highly specialized in technology to promote the country’s leadership as a hub of innovation in the region and boost its role in the world’s semiconductor supply chain.
The company will also invest 8 million dollars in the Guadalajara Design Center to update it, since it’s one of the most important validation sites for the firm worldwide, seeking to develop other areas such as Artificial Intelligence and 5G networks.
In addition, Javier Marroquín Calderón, Secretary of Economic Development of Tlaxcala, recently reported that they are negotiating the installation of a semiconductor plant to supply the country’s automotive industry.
In 2020, the Covid-19 pandemic was a major problem in all global supply chains, however, one of the sectors with the greatest impact was the industry of semiconductors, due to the shortage generated by the increase in demand for automotive and electronics industry.
Also, it is known that Ukraine is the supplier of 70% of neon gas, necessary for the production of semiconductors, so the conflict with Russia could prolong the crisis.
Pat Gelsinger, CEO of Intel, indicated that the shortage of semiconductors will continue until 2024, due to the lack of manufacturing equipment, and not in 2023 as he had previously predicted.
Although Mexico does not focus on chip manufacturing, its focus on component research and validation is also essential for the development of this industry, such that Intel sees Mexico as one of the most important technological centers in the region, considering it a leading country in terms of the talent of its engineers for component research; Intel’s vice president for the Americas even told Expansión (2022) that they’ve seen that Mexico has some of the best engineers in the world.
In 2020, Mexico participated with 0.5% of the exports and 2.8% of the world’s imports of Integrated Electronic Circuits (HS4 8542), and made 0.9% of the exports and 2.8% of the global imports of Diodes, Transistors and Similar Semiconductors (HS4 8541).
For 2021, the total trade of the circuits of Mexico was $25,402 million dollars, and for the DT&S was $4,006 million dollars. The main export destinations for Integrated Circuits were the United States (80.4% share), Hong Kong (7.4%), China (3.2%), Japan (2%) and Singapore (1.7%).
Likewise, the Mexican entities with the most international circuit sales were Baja California (55.8% of exports), Chihuahua (21.1%), Jalisco (3.2%), Mexico City (1.2%) and Nuevo León (0.9%).
As of 2020, there were 210 establishments in Mexico dedicated to the manufacture of electronic components that generated $89,783.32 million pesos (MP) of gross production, $62,024.74 MP of gross value added and incomes of $18,540.58 MP, 85.% from the foreign market.
By 2021, 11.87 million modular circuits were produced, an increase of 22.5% compared to 2020. In addition, from 2020 to 2021, there was a 30.1% increase in the production value of circuits , 19.2% in sales volume and 23.8% in sales value.
Almost all investments in the electronic component manufacturing industry are confidential, however, it is known that in 2021 investments from the United States and Japan reached $5,131.8 million (1.9% of their total FDI in Mexico) and $1,135.1 million dollars (3.9%), respectively.
According to the Revealed Comparative Advantages (RCA) in Integrated Electronic Circuits and the Economic Complexity Index (ECI), the entities in the country with the greatest specialization and growth potential are those on the northern border and the Bajío, such as Baja California, Jalisco, Chihuahua, Tamaulipas, Nuevo León and Querétaro.
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