Semiconductors are used to create USB drives, PC cards, smart cards, microchips, microprocessors, transistors, among many other technological components used in modern electronics.
Semiconductors are components required to produce computers, automotive systems, televisions, telephones, medical equipment, printers, and other tech products.
More than 60% of semiconductor manufacturers are located in Asia, mainly in China and Taiwan, and many manufacturers around the world depend on semiconductors for their production.
On August 9, 2022 the POTUS signed the “Chips and Science Act”, on a quest for protecting the semiconductor industry, reduce US dependence on Asian companies and attempt to make alongside Mexico an in-continent leading semiconductor industry.
In today’s world, a semiconductor industry is crucial for everything related to information technology. This industry is also a key cornerstone for economic edge and national security.
The “Chips and Science Act” has created expectations for a strong growth in US-Mexico bilateral manufacturing. It presents an important opportunity to develop a strong semiconductor manufacturing cooperation.
Further, on April 20, 2022 the Mexican Minister of Commerce signed a cooperation agreement with Intel Mexico. The objective is to strengthen the semiconductor industry, promote innovation, and provide long-term training for Mexican workers. All this, to create a favorable environment for North American companies that will lead to the crafting of a strong complementary semiconductor industry.
We know the legal framework exists via the USMCA. And we know both countries’ governments are paving the road for this endeavor to succeed. All this is feasible, but there are quite a few supply chain efficiency challenges that will need to be overcome, and a large-scale cost competitiveness leap to make before we can see this binational industry a reality.